In fact, the second approach is now prominent and has established a pre-processing step for constructing a vocabulary of sub-word units before training the NMT model.
several studies have shown that segmenting words into sub-word units without preserving morpheme boundaries can lead to loss of semantic and syntactic information and, thus, inaccurate translations (Niehues et al., 2016;Ataman et al., 2017;Pinnis et al., 2017;Huck et al., 2017;Tamchyna et al., 2017).