Design Help or Opinion

I'm looking for design help! It's an old 2 story house, with 2 beds/1 bath upstairs and 2 bedrooms in the basement. The main floor used to have 1 bed/1 bath, but whoever started working on it removed the bedroom wall. I think the intention was to make a large, open kitchen that flows into a dining room (where the only main floor bedroom was). Would you design it this way? Or would you add the wall back up to have a bedroom on the main floor? ARV is aroundd 275k.

So: 1. Large open kitchen/dining area. 2bed/1 bath upstairs, 1 bath main floor, 2 bed in basement (no bedroom on main)

Or 2. Smaller, closed off galley kitchen with 2bed/1 bath up, 1 bed/1 bath main, and 2 bed basement

Thanks, I appreciate any opinions/thoughts/suggestions!