Of course a baby isn't automatically the perfect size for your body; it would be marvellous if it were bit that's clearly untrue.
I can't fully understand such a large difference in the dates they are offering for the two options - why is the section so late? Most electives are performed at 39 weeks to reduce the chance you go into labour beforehand. It seems odd to risk waiting until 40 weeks for a third baby if the aim is to avoid labour.
Personally with a history of shoulder dystocia, I would avoid VB at all costs - it's not always just the size of the baby, it can also be the proportions between the head and shoulder, and I know one person who even had shoulder dystocia with a premature baby. But there is a lot to consider. Do you tend towards fast or slow labours? If you did go into labour the day before the planned section, how quickly can you get to hospital and how likely is it that the labour would be too advanced to do a section?
If I were you, I think I would probably choose a section if an earlier date is available.
For what it's worth, I've had two very uneventful inductions and loved both of them, so it's not that I'm massively anti-induction. One of those was at 37w0 days and the baby was born without any breathing issues thankfully. And there is something to be said for keeping injuries to one area if you've already has VB (and vice versa) but of course, you can only attempt a VB, not be guaranteed you won't need a section anyway. But shoulder dystopia is definitely not something to be messed with.
Whatever you do, I would not decline both options and just wait and see.
Maybe discuss all combinations of options with your doctor?