Values in data bases often represent sums of money, for which reading (1) is
appropriate. One tenth of $2.53 is $0.253; rounding that to $0.25 would in
some circumstances count as fraud.
Of course, values in data bases often represent physical measurements, for which
reading (2) is appropriate. There is, however, no SQL data type that expresses
this intent.
Interestingly, my original exposure to this was math for physics, which would imply reading (2) if I understand this correctly, yet I was taught (1). (Later exposure was for business databases, so (1) was still appropriate.)