They have more than two options. Keep in mind that the FCC is not a police force. They don't have people monitoring radio stations in every city, checking for rule violations. They depend on listeners filing complaints. This isn't something people are likely to go through the paperwork to complain about. Nobody has ever lost their license about a TOH ID. They're not going to change the rules about IDs. The current rule is sufficient: Do it at a natural break. That's what happened here.
A sweep of eight songs-in-a-row is no more "unbreakable" than a sweep of eight commercial spots. If a five second
legal ID can be buried in between spots in a cluster at x:49, it can be sequenced in between two songs played closest to the top of the hour. So if the language of the law doesn't reference TOH anymore, why shouldn't the legal be buried at the bottom of the hour? That's also a "natural break". If it does reference TOH, and the station isn't in the middle of some twenty minute symphony or live opera or breaking news coverage that truly is uninterruptible, that ID could have been at/near the true TOH.
As for "...the FCC is not a police force. They don't have people monitoring radio stations in every city, checking for rule violations..." The FCC has a headquarters in Washington DC, a major market. They have field offices in or near a number of other major markets. They also have non-field employees, and probably interns, who can listen to a radio while performing other functions. Everyone has a desktop or laptop computer, which is capable of recording audio. (And if they can't figure it out, I'll be glad to show them.) So devote a month to monitoring stations in each of their local markets, logging and recording the legal IDs (and confirming that they truly are "legal"), and then, at the end of the month, issue violation notices to the offenders. In those warnings, state that future violations will result in fines and eventual revocations. Issue a press release.
Wanna make book on how long it will take for word to get around the industry, and how many minutes more before they clean up their acts? This stuff is not brain surgery, or even transmitter maintenance.
Nobody had a gun put to their head to acquire a broadcast license. Everybody who did, did it voluntarily, and attested to their intent to follow the laws and rules of the United States. So follow them, and enforce them. Put everyone on notice of the government's intent to go back to enforcing its own code, and weed out the bad actors. A lot of the other bad acting and "ignored" rules will fall into line once they show a renewed seriousness. Simple concept, even if it may not be trivial to achieve.