Many of the imams of tafsir (exegesis) hold the first possibility, that "khalifah" here means a successor to Allah, and they proceeded on this basis. However, I read that Shaykh al-Islam Ibn Taymiyyah strongly rejected this view.

And what remains? Nothing remains. This is the greatest deficiency attributed to Allah, that it is said He does not speak and does not act. And this verse indicates the establishment of actions. Is a present participle for the future or for the past? For the future. What is your evidence for the future? No, it is in the accusative case, and a present participle is not put in the accusative case unless it is for the future. And on this basis, there is evidence for the establishment of voluntary actions for Allah, Mighty and Majestic. The time is up. Any questions?