I think the "paradox" arises from the fact that both 1 and 2 are correct, in the following sense.
The total horizontal distance covered whilst the ball is **in the air** is 2m. But after 2 seconds (assuming a horizontal speed of 1m/s) 2m has been covered whilst the ball is in the air and from now on the ball is rolling on the ground. The total horizontal distance covered is unbounded but to get the unbounded distance you have to (also) consider the distance travelled whilst the ball is **on the ground**.
I have made some assumptions here, like the (vertical) height of each bounce is strictly less than the height of the bounce before it but this usually happens in real life (on earth, anyway).