Glad you shared this. It’s a fun exercise to think about.
While not rocket science, presenting the user with three 3 explicit options, instead of two, adds confusion. That said, the voicemail option makes sense to me.
If I get a call while on the phone, I’d like to choose between two options: Either take the call or don’t (send to voicemail). Sending the incoming caller to voicemail ends the interaction and stops the call waiting tone.
If I take the incoming and decide to end the original one, we (both parties) usually know this up front. The original caller hangs up and there’s no need to tap a button to explicitly end the interaction.
If it’s undecided whether or not the original call will resume, the other user automatically gets placed on hold.