Which of these password policies is the most secure?

Splitting the password is certainly worse. It allows you to create an eight-character rainbow table. This implies that all system passwords will consist of 8 characters. (That's exactly how NTMAN LAN passwords were broken.) In your case, it would just take two rainbow tables.

The nine-character password system has no visible defect, which implies that if you enter a correct 14-character password, it will be stored securely as a simple pound sign.