The correct answer is the 2nd option

Yes, and

you're reducing the set of possible passwords.

this is wrong.

The set of possible values for each character in the password is increasing, from N to (N+10). What is decreasing, is the time to guess each password if you know the password contains 1 or more numbers. This is a critical assumption (threat model) that it's usually left out of password estimators - some don't even employ any sort of threat model and just perform naive entropy estimation (example). Contrast this with:

Let X be OP's 20 character password which contains no numbers. Let 2 different threat models: in A, the adversary knows the password contains 1 or more numbers. In B, the adversary does not know how many numbers exist in the password. Under which assumption will the adversary take longer to crack X?

Doesn't the answer to the above question make more sense as a password strength estimate? After all, an attacker ready to crack your password is going to take into account every possible bit of information they have. Hence, by specifying that they should try passwords with at least 1 number contained, you are giving information they can use to their advantage, reducing the set of passwords an attacker has to guess - even if the set of possible passwords is increased.

If you want to read some more, here's some rationale behind zxcvbn, Dropbox's method for estimating password strength. See the demo here.