Windfall wisdom

Hi folks, I've been an extreme lurker here for a while but I need your wisdom on what to do with a $512k medical malpractice windfall that was settled about a year ago. I haven't touched it beyond placing it into a Vanguard money market account because I was too focused on getting better. I am left with permanent physical disabilities, but I am currently well enough to work full-time and plan to for several more years (I was pursuing FI prior to the medical issues/windfall). Some personal stats and my primary plans:

Me: 28F, SINK

Debt:
* $216k primary mortgage, 30-yr @6.5%
* No car, student loan, or CC debt

Assets:
* $101k emergency fund HYSA
* $200k taxable brokerage
* $410k Roth IRA/MBDR/401k
* $230k equity on primary mortgage
* $14k HSA

• $955k NW sans windfall, $1.46M with windfall

Income:
* $220k/yr salary + bonuses
* $20k/yr various LT/ST CG and equity appreciation

Spend:
* $51k in 2024, on track for $53k in 2025
* AT savings rate 60+%

I see a few different plans of what to do with this money now that I'm well enough to think about it:

1 – All proceeds from the settlement into VTSAX/VTI
2 – Pay off primary mortgage ($216k) and invest the remainder in VTSAX ($296k).
3 – Invest the mortgage principal amount in a CD and the remainder in VTSAX (CD rates estimated 3.9-4.2%).
4 – invest the mortgage principal amount in muni bonds and the remainder in VTSAX (muni bonds estimated rate 4.5%?)

Market volatility being what it is right now, I am inclined to pass on option 1. I have significant liquidity and a lower risk tolerance than my age would suggest. Emotionally I'd like to pay off the primary mortgage (option 2) but I recognize the math is a lot muddier. Due to itemized deductions, my 6.5% rate is more like 4.5-4.9% effective given my 32% tax bracket. This is likely close to muni bond yields over the 5 year horizon and I could easily invest the principal until rates come down to re-fi the primary mortgage. On the other hand, my medical situation could get worse over the next few years, leading me to quit full-time employment; having the lower cash flow from the paid house is useful for ACA subsidies. Medical situation aside, I plan on stopping full-time work in my 40s anyway.

Thoughts? And thanks for your time reading.

TL;DR pay off house at 6.5% or invest