Bombardment casualties and Leaders

[dxdavieau]

This is going to be controversial, like all house rules, so I apologize ahead of time.
I play it that if every other unit in a hex is eliminated, the leader(s) are too. My reasoning is that, considering what just happened, even if he's still alive, he's got bigger problems now with all the dead & especially the wounded. Maybe he's efficient/cold enough to move on to another unit....
If playing by the rules, I think (IMHO) you played it correctly, ie; option 2