As a programmer, I’d prefer a combination of the two: Dr Johnson kicked a large rock and said, as his foot rebounded, “I refute it thus.”. as I think it’s weird that a punctuation mark inside a quote can end the sentence that contains the quote. I’d argue like this: in the above case there are two sentences, the quote and the sentence that contains the quote. Both need to be terminated with a period.
It doesn't. The end quote with a period inside it ends the sentence.
> I’d argue like this: in the above case there are two sentences
There aren't. English doesn't nest or overlap sentences. Ever. Therr are plenty of ways in which English combines multiple units which each could otherwise be their own sentences into more complex sentences, but none of them involve having something which remains a sentence inside a longer sentence.