Perhaps a fourth option? Operate a 2nd duplicate server with rules similar to what was in place when the server launched. 3 toons max, and either no MQ2 or only the use of a custom made MQ2 client.
Changing the MQ2 rules on the server as is will likely disturb the core of the base that boxes large (way way way too large) numbers of toons. I hate the thought of that. Let them box in peace, imho, and give us another playground in which the anti-boxers can safely operate away from those who box 54 players across 8 computers. Offer players a one-time character copy (per acct) from one server to the other (future transfers even possible via donation.)
My bet is you'd get a hefty number of people playing the new server! THF was wildly popular back in the ole "no MQ" days. Lifestyle changed and you want to go it solo more often with more toons? Support the server and get transfered to the FFA Boxing server. Tired of watching one person clear his way through all of the content by boxing 3+ groups? Click that box and transfer over to the cool server where you have no choice but to cooperate

Edit: by character copy I mean transfer

You probably shouldn't be allowed to have the same copy on both servers, that would defeat the purpose!