I see. There ARE numerous cancellations in that spatial problem. The whole first addend is cancelled out with four separate printed lines through its four separate digits.
Although it is tempting to use one "big" cancellation for that addend, we should do as print does (and as is mathematically logical) and cancel each number separately (using separate "line through previous item" symbols .=@:). In other words, we should use your "Example 1."
Thank you for asking!