Should I convert the frontend generated UUIDv6 to binary(16) for use in SQL Server as the clustered primary key?
I would consider another option: cluster on a surrogate key (like Id int IDENTITY(1,1) NOT NULL), and make the app-generated UUID a nonclustered primary key.
This avoids the problems you called out with options 1 and 2, because you don't have to worry about the sorting / fragmentation issues in your base table, or potentially esoteric issues with clustering on binary.
It will also save you some space (int is smaller than uniqueidentifier and binary(16)), as the clustering key is included in every nonclustered index (as well as other tables that reference this table via foreign key).