If you wait for the prosecution witnesses to be over (2nd situation), then the trial itself would almost come to an end, since what would be left then would be statement of accused under S. 313 Cr.P.C, his defence evidence (if any) and the final arguments. So, there is no point in going for the so-called quashing of charge sheet after the prosecution witnesses are over.
Therefore, the so-called quashing of charge sheet would be relevant only when it is after filing of the charge sheet (1st situation). Moreover, you should call it “discharge” instead of calling it charge sheet quash, since usually after filing of charge sheet you would be filing a discharge application.