Yes 1 does sound more natural, although I would say " Not having retired from work, she is still making money" sound better than both..
I'd agree with that.
You were in the minority stating that it was "far more correct". From memory, I don't think the majority was claiming it was incorrect. Was that your impression?I agree with that too of course. And Bhaisahab, did you see the recent post in which numerous people told our student that "Having not done her homework...." was preferable to "Not having done her homework...."? I couldn't believe I was in the minority stating that Not having.... was correct.
Perhaps they weren't familiar with the novelty of it?More people seemed to chime in for the "novel" answer than the "traditional" answer, if memory serves.
https://www.usingenglish.com/forum/ask-teacher/127517-not-having-finished-having-not-finished.html
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