Method 1 is slightly longer than just make flash :
$ mkdir ${HOME}/git
$ cd ${HOME}/git
$ git clone https://github.com/keyboardio/Kaleidoscope
$ cd ${HOME}/git/Kaleidoscope
$ # Ask Kaleidoscope to install the compiler toolchain, arduino-cli and platform support
$ make setup
$ export KALEIDOSCOPE_DIR=${HOME}/git/Kaleidoscope
$ cd examples/Devices/Keyboardio/Model01
$ make compile
$ make flash
For the persist the Kaleidoscope installation directory, you may add it to your shell rc :
$ echo "export KALEIDOSCOPE_DIR=${HOME}/git/Kaleidoscope" >> ${HOME}/.bash_profile
I don’t use the Adruino IDE, so can’t tell about the other method, but in memories they are incompatible (I don’t remember exactly why).
Hopes it helps !