The latter. The former is purely experiential knowledge, and as I have repeatedly said is contained in a superset of verbal (what you call 'objectiive) knowledge, but is disjoint with the set of verbal ('objective') knowledge itself. This is my box metaphor.
You have said that according to you, stipulatively, subjective knowledge is a subset of objective knowledge. What we mean by objective knowledge is generally knowledge that can be understood at second hand, without being in a special state or having had particular experiences. You say that the subjective subset of objective knowledge is somehow opaque, so that it does not have the properties usually associated with objective knowledge..but why should anyone believe it is objective, when it lacks the usual properties, and is only asserted to be objective?
redness of red is still physical
I can't see how that has been proven. You can't prove that redness is physically encoded in the relevant sense just by noting that physical changes occur in brains, because
1 There's no physical proof of physicalism
2 An assumption of physicalism is question begging
3 You need an absence of non physical proeties, states and processes, not just the presence of physical changes
4 Physicalism as a meaningful claim, and not just a stipulative label needs to pay its way in explanation...but its ability to explain subjective knowledge is just at is in question.
What does this knowledge do? How do we tell the difference between someone with and without these 'subjective experiences'? What definition of knowledge admits it as valid
Its hard to prove the existence of subjective knowledge in an objective basis. What else would you expect.? There is a widespread belief in subjective, experiential knowledge and the evidence for it is subjective. The alternative is the sort of thing caricatured as 'how was it for me, darling'.
In the Mary's room thought experiment, Mary is a brilliant scientist in a black-and-white room who has never seen any colour. She can investigate the outside world through a black-and-white television, and has piles of textbooks on physics, optics, the eye, and the brain (and everything else of relevance to her condition). Through this she knows everything intellectually there is to know about colours and how humans react to them, but she hasn't seen any colours at all.
After that, when she steps out of the room and sees red (or blue), does she learn anything? It seems that she does. Even if she doesn't technically learn something, she experiences things she hadn't ever before, and her brain certainly changes in new ways.
The argument was intended as a defence of qualia against certain forms of materialism. It's interesting, and I don't intent to solve it fully here. But just like I extended Searle's Chinese room argument from the perspective of an AI, it seems this argument can also be considered from an AI's perspective.
Consider a RL agent with a reward channel, but which currently receives nothing from that channel. The agent can know everything there is to know about itself and the world. It can know about all sorts of other RL agents, and their reward channels. It can observe them getting their own rewards. Maybe it could even interrupt or increase their rewards. But, all this knowledge will not get it any reward. As long as its own channel doesn't send it the signal, knowledge of other agents rewards - even of identical agents getting rewards - does not give this agent any reward. Ceci n'est pas une récompense.
This seems to mirror Mary's situation quite well - knowing everything about the world is no substitute from actually getting the reward/seeing red. Now, a RL's agent reward seems closer to pleasure than qualia - this would correspond to a Mary brought up in a puritanical, pleasure-hating environment.
Closer to the original experiment, we could imagine the AI is programmed to enter into certain specific subroutines, when presented with certain stimuli. The only way for the AI to start these subroutines, is if the stimuli is presented to them. Then, upon seeing red, the AI enters a completely new mental state, with new subroutines. The AI could know everything about its programming, and about the stimulus, and, intellectually, what would change about itself if it saw red. But until it did, it would not enter that mental state.
If we use ⬜ to (informally) denote "knowing all about", then ⬜(X→Y) does not imply Y. Here X and Y could be "seeing red" and "the mental experience of seeing red". I could have simplified that by saying that ⬜Y does not imply Y. Knowing about a mental state, even perfectly, does not put you in that mental state.
This closely resembles the original Mary's room experiment. And it seems that if anyone insists that certain features are necessary to the intuition behind Mary's room, then these features could be added to this model as well.
Mary's room is fascinating, but it doesn't seem to be talking about humans exclusively, or even about conscious entities.