I just want to be clear that these are not the only two ways to do diversity. Even if you're just focused on hiring (which is a myopic way to view diversity, even at the most simplistic level you need to think about retention) hiring is complicated and I've seen people try a variety of things to get a wider pool of qualified candidates in the pipeline (offering remote work, better paternity/maternity leaves, outreach with local women in engineering groups, etc). This isn't at all my area of expertise and I've seen a lot of things outside of the dichotomy you described.

Also, idk why people view quotas as all of "diversity". I've literally never worked at a place that considered this but I see people mention them all the time on the internet.