For these revamped New Republic edits, I’ve always been in favor of ending Episode 2 with Grogu being captured. Lets you have a dark ending, you get to move most if not all of the Luke crap into one Episode, and you get to trim even more of Book of Boba Fett to your liking and avoid most of the bad stuff there as well.
This is the plan that makes most sense from a movie length point of view and I’ve got some great ideas to make episode 2 about Boba and Mando. My one issue is the time skip between the end of S2 and start of season 3, which would then be part of episode 3.