Strongly agree with @Herman, @bill_anderson and others on option 2. Proper URL encoding much simpler than getting all publishers to replace characters from their project IDs. Slashes in project IDs sometimes have real meaning, and getting all organisations to implement manually RFC 3986 rather than have libraries that do the same job seems like a recipe for disaster to me.
For example, if the project ID is
2017/123-456, should both the publisher and the implementing partner be told that they need to remember to ignore the slash and turn it into some other character? Clearly that won't always happen, so tools will always need to handle these characters, so why make people go to any effort? Even the conversation about what to do is complicated and going to add a lot of overhead.
I think we need a clearer explanation of why percent-encoding URL inputs is insufficient before undertaking what would be quite a disruptive step.