Hi Malkesh,
With option 1 which is integrated installation, it creates a single-node failover cluster, from which additional nodes (nodes on which the instance can fail over to) are added via a separate installation.
In contrast to the one-node-at-a-time approach of the integrated installation, the advanced installation prepares multiple-cluster nodes in one step, before completing the installation on the node chosen as the initial active node for the instance.
In the process of installing cluster, many things can go wrong, usually related to active directory and privileges. If you use the integrated installation method, you may wait longer for the installation to complete, only to find out that at the last minute
the cluster was unable to register the CNO in active directory and the whole installation fails.
Besides, you may have a partially installed SQL Server cluster and you have a mess to clean up. By using the advanced method you are able to minimize the risk by putting the risky section just at the end during cluster completion. If cluster completion fails,
you simply need to diagnose the problem and re-run just the cluster completion process once again not the whole setup.
Reference:
http://clusteringformeremortals.com/2014/01/10/creating-a-sql-server-2014-alwayson-failover-cluster-fci-instance-in-windows-azure-iaas-azure-cloud/
Thanks,
Lydia Zhang