Room Acoustics and Speaker Placement

I think you're going to like option #2.  Having an open area behind the listening position can be very constructive.  No unwanted reflections.  Good luck and let us know how it works out.  

Option 2. 

You can differentially decorate the sidewall the at is closer to the speaker to absorb a bit more. Open behind is great, since the great depth will eliminate rear reflections. And as a bonus, it will probably sound better in the dinning area. 

Number two is the better of the setups. You might get some unwanted ambient sound from the dining room in setup 2 but that's better than having the speakers in, effectively, two different acoustic environments as in option one. 

Challenging scenario. I think rear wall is vital to imaging

and bass support etc but,… how to omit side wall reflection?

perhaps sound dampening? With both side walls you’re still dealing

with unequal reflection timing, so how do you address that? And

you wont have the imaging that you would with rear reflection.

challenging scenario. You didn’t mention speaker separation 

distance or whether you will treat it as near field listening.

good luck and all the best.

Still no answer about the distance to the sidewall. This is a critical piece of information.

The strongest reflections caused by speakers in a listening room are called “first reflections”, which are a single bounce off walls, ceiling, and floor before arriving at the listening position. However, the human brain is adept at recognizing direct sound despite the first reflections, provided two things happen: 1) the first reflections contain the same or similar frequency content as the direct sound, and, 2) the first reflections arrive within about 10ms of the direct sound.

By their nature, first reflection path lengths are longer than direct sound path lengths; if they are too long—in other words, longer than 10ms, which equals 135″ longer than the direct path length—they become detectable as echoes and deteriorate the stereo sound quality. (Speed of sound is 1,125 feet/second, so 1 millisecond is 1.125 feet, which is 13.5″.)  First reflection path lengths of 135″ longer than the direct sound path may benefit from acoustical treatment (i.e. redirection, absorption) to avoid being heard. Diffusion on sidewall first reflections has been shown to reduce speech intelligibility. Our preference is to use flat reflection, angled reflection, or absorption....

To Treat or Not To Treat Sidewall First Reflections

When considering sidewall treatment options at the first reflection points, I try to balance a few factors: how much longer are the sidewall’s first reflection path lengths compared to the direct path length; the average decay time for the midrange and high frequencies; a person’s preference between strong imaging or a wider soundstage.

https://pmamagazine.org/the-room-acoustics-series-reflecting-on-sidewall-first-reflections/