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In terms of business both the actions will fine as in reports it will show the same result.
From technical (data level) It is your decision on the way you want to go ahead.
In case of a error it is better practice to purge the next changes and update the record with correct details.
Thank you for the reply. Your answer cleared my doubt on business impact.
However, we found that in reports, 2 records will be shown with the same set of data (if at all we create a report to show the employee statuses between 2 given dates ), if we follow the 2nd option. That may be a problem for users.
You are right and that is what I said that technically it may give some challenge and the better option will be to purge the incorrect change and enter data properly.