What is the point of outer in a join?
LEFT JOIN and LEFT OUTER JOIN are synonymous so apologies but it sounds like option 2 :-)

The "Outer" join (which preserves unmatched rows) is as opposed to "Inner" (which doesn't).

There are three flavours of outer join. Left, Right, Full (dependent on which unmatched rows are to be preserved).

As SQL doesn't have direct join syntax for any other types of join (such as left/right anti semi join) there is no ambiguity in allowing the OUTER keyword be optional in the grammar.

The LEFT ANTI SEMI JOIN sounds like what you expected LEFT OUTER to do. You can implement that in a variety of ways. Usually NOT EXISTS is preferred but you can use LEFT OUTER JOIN in conjunction with IS NULL to keep only the non matched ones.

This is all confirmed in the "Join type" section of the documentation


  LEFT [ OUTER ] Specifies that all rows from the left table not
  meeting the join condition are included in the result set, and output
  columns from the other table are set to NULL in addition to all rows
  returned by the inner join.


The square brackets around the [OUTER] just mean that this is optional but nonetheless the same definition applies.