What's the best way to display 2 mutually exclusive setup options in a form?

Question

I have a form which has a section that has 2 way to configure. You can only choose either. Each option is a smaller form where you setup for the chosen option. These are my drafts. Which one is better, or if there's another way I'd appreciate too.

Solution 1: Using tabs

My concern with this one is that users may be confused that the 2 tabs are separate configurations but not mutually exclusive. Meaning they think tab A is a setup for A and B is a setup for B concurrently existing, rather than A means choosing A for this for and setup for A

Solution 2: Using radio button

Answer 1

You have rightly analysed the approach that you have shown in solution 1.

"Tabs minimize cognitive load by chunking content into scannable pieces instead of showing it all at once."

And because in your case there is a conditional selection that is controlled by system to the user(i.e. selection of only one type), it is important that you keep options active only one at a time.

Solution 2 looks better for your use case. Also, if it is a web app that can be accessed in larger screens, consider showing the radio controls horizontally that can make you save the space.

Something like this

One more thing you can do consider,

When you have one selection active, the content of the other is not useful for the user and looks redundant. You can optimize the space by showing only the relevant info at the instance.

If the demand is to keep showing the other information then may be you can dig in a little more to understand the why and then make the decision of showing such info,