During the strata reform period back in 2014 the NSW Parliament released various draft papers on the reforms.
In the draft model by-laws there were originally 3 options for pets.
Option 2 of your AGM motion was option 3 in the original draft model by-laws for new strata schemes.
When the legislation was passed option 3 from the draft had been removed.
The Parliament no longer considered a prohibition on pets to be appropriate.
Your SP might pass option 2 on your agenda but if it does then it is a NCAT matter waiting to happen and your owners corporation would not fair well if the by-law is challenged.
In recent times there has been a number of cases Yardy, McCormick, Roden and more recently Cooper which all point to a by-law such as option 2 being contrary to the Act, i.e. section 139
139 Restrictions on by-laws
(1) By-law cannot be unjust A by-law must not be harsh, unconscionable or oppressive.
And a by-law such as option 2 has already been viewed as invalid in a number of cases.
First thing I would recommend is ask the motion be amended to remove option 2 as it is contrary to the Act (s 139). Cite the above cases as evidence that such an option has already been viewed on a number of occasions, by NCAT, as invalid.
If that fails then request the Chair exercise his/her discretion under cl 19 of Sch 1 of the SSM Act and rule the motion out of order:
19 Chairperson may rule certain motions out of order
The chairperson at a meeting may rule a motion out of order if—
(a) the chairperson considers that the motion, if carried, would conflict with this Act or the by-laws of the strata scheme or would otherwise be unlawful or unenforceable, or
If that fails and option 2 passes then make immediate application for mediation (free) on the basis the resolution is contrary to the Act and the Chair failed to properly exercise his/her discretion.
If that does not resolve the matter then it gets messy as you may need to go to NCAT to get the resolution invalidated.
You should not need to vote down a motion that is about acting contrary to the Act.