There's a derivative of the first option, which is that it's "temporarily" lost. As in, you get it eventually, unaltered. But, like, several days later, which is super inconvenient.
The delayed bag has happened to me a couple of times. When it's at your destination, it really sucks. But when it's at home, it's great, because you're not missing anything important and are eligible for free clothes: https://airpassengerrights.ca/en/practical-guides/baggage/de...