You’re talking like that second option is anything other than inevitable. Death is only interested in resuming her position of power and dominance over the world, and (we know now) getting revenge on the Null for everything he did to her.
Hugh knows that there are people Phil cares about. To someone like Death (who is purely interested in power, dominance and revenge), that is a vulnerability. And since she can’t allow the Null to roam freely (due to being a threat to her power, which is unacceptable), she will exploit those vulnerabilities to bring the Null under her control.
In all likelihood, Death is going to use Hugh to identify who would make the best hostage.
it seems counter intuitive to expect Phil to just hand over his weaknesses. While I know he hasn’t spent a huge amount of time with Hugh, I’d say that if he’s asked he’d spill more information than Death wants and nothing that’ll help her stop him.
…Either that or she DOES hurt one of them and Phil flips out on the Null trip.