I am having trouble visualizing where the wall to the right goes- does it end? How does it continue into the bathroom? You can cut both right and left tiles and turn the cut edge toward the center tile. You can get a file and make the edge smooth, but it takes a bit of practice. If you are using a tile saw you should not have any trouble making good cuts.
Renee

Renee:

The wall to the right continues into the bathroom, the tile ends where the shower ends. My plan is that the edge of the tile at this location will be exposed (no Schluter trim, etc).

Renee:

I read somewhere that cut edges should always be "buried" in a corner. Is this incorrect?

We used 12 x 24 tile in our master shower and stacked it as shown in your first option. The shower is about 4 feet by 5 feet. However, we used Schluter trim on the side that continued into the room.

It depends on the tile and how good the cut and sand is. If you can tell it has been cut, it should be buried.
Renee