Final answer:
Infosys' implementation of dynamic location granularity in a weather update service suggests the use of both abstracting and minimizing data strategies for user privacy, thus option '3, Both 1 and 2' is correct.
Step-by-step explanation:
When Infosys designed a location-based service that provides local weather updates with dynamic location granularity, it likely implemented a privacy design strategy that focuses on both abstracting and minimizing user data. This strategy would involve abstracting user location data to a less precise level so the privacy of the user is protected while still offering the service, and minimizing the collection and storage of location data to what is strictly necessary for the service to function. Consequently, the correct answer is '3, Both 1 and 2' as both abstraction and minimization are key elements in maintaining user privacy in location-based services.