In my opinion we are missing at least one option. It would be an alternative for the option below:
"Products Out of Stock are orderable, and the field 'Availability' below is displayed"
So the above option plus:
"Unless product is marked as Discontinued".
This would mean you could still order a product marked as Discontinued, as long as there is stock. If stock reaches zero, the Add to Cart button should be disabled / show something like "No longer available" instead.
Right now, the discontinued functionality doesn't really bring much, am I right?