Should two artist entries be kept, add all the old stuff to TheDashDub, then add all the new and retroactively-updated stuff to Chris Heron?
This is what I'd do.
From a more abstract viewpoint, a person decided to mostly scrap a persona (I.e. an MB Artist) and create a new one re-using old recordings, right?
I'm not a fan of deleting valid data and I don't think anyone around here really is. Also merging the artists just doesn't seem to represent artist intent, so I wouldn't go with your first plan.
For most intents and purposes, there have been multiple releases (e.g. "Applejack's Daydream" and "Daydream") by different artists, using (mostly) the same tracks (Recordings). Unfortunately they use the same BandCamp page, so some links might have to be removed for "TheDashDub" releases.
This is basically what @jesus2099 and @CallerNo6 have also said, I was just trying to explain the reasoning for this.
No matter what the artist did, "TheDashDub" released a bunch of music at some point and that data still stands, "Chris Heron" now created new releases and they should be added as well. To prevent duplication and confusion, re-using recordings and making use of Works and annotations would make sense.