I would do none of those options.
I would take a router and cut out to the bottom of the lowest depth, say
1/2". Then cleanup the edges square with a chisel.

Then I would get a piece of wood to replace this section, (consider a
hardwood replacement which will stand up to time) .. same size, epoxy it
in place. This will last the next 100 years. Avoid nailing or screwing
so the next guy can do the same assuming the house lasts 100 more years..

blueman wrote:
One of the wood structural beams (4x8) of our porch serves dual use as a
"step". However, over the many (~100) years, part of it has work down so that
it is no longer flat with the amount of wear varying between 1/4 and
1/2" For many reasons, I do not want to replace the beam but I would
like to level it off and restore it to its original height.

The 3 ideas I am considering a
1. Sand it down to an even level and then fill it with a uniform
thickness board. My concern is that it could be a fair bit of work
and that I would prefer not to take off more wood.

2. Fill and level off with an expoy-type mixture. Not sure though what
would be the best materials to use and how strong/durable it would
be.

3. Hybrid approach. First fill to get the surface level and then cover
with final uniform 1/4" piece of material (though not sure what
would be best to use that would weather well and stand up to some abuse)

Any thoughts on whether this or other approaches would be recommended?

Thanks!