Al-jawab billahi at-taufeeq (the answer with Allah’s guidance)
1) The first view is correct (forgiven until one repents).
The kind of Shirk that Allaah does not forgive is the major Shirk if someone dies persisting on it. Allaah Ta’ala says : “Allah does not forgive (the sin of) joining other gods with Him; but He forgives whom He pleases other sins than this.”[4:116].
The meaning of the verse is that whoever dies while a Mushrik (polytheist) Allah will not forgive him and he will surely be punished for this sin, i.e. he will remain in Hell-fire forever.
As for the person who repents from Shirk whether small Shirk or major, Allah forgives his previous Shirk and accept his repentance. Allah Ta’ala Says : “Say to those who have disbelieved, if they cease (from disbelief) their past will be forgiven.
” [8: 38].
Also, Allaah Ta’ala says : “Say: ‘O My slaves who have transgressed against themselves (by committing evil deeds and sins! Despair not of the mercy of Allaah; verily, Allaah forgives all sins. Truly, He is Oft-Forgiving, Most Merciful’. [39:53].
The Prophet (Sallallahu Alaihi wa Sallam) said: “Islam (i.e. converting to Islam) wipes out all the previous (misdeeds)” [Reported by Imam Muslim ].
And Only Allah Ta’ala Knows Best.
Moulana Qamruz Zaman