My impression by the end was that it was kind of both. The sacred timeline was really multiple timelines, but tightly constrained with the defining characteristic being that while they could diverge, they had to ultimately converge on He Who Remains, as enforced by the TVA. So variants could exist as long as their existence wouldn't, somehow, ultimately result in a different He Who Remains existing. E.g. alligator Lokis that eat the right neighbour's cat are OK.
But without those constraints, then the range of timelines is expanded, and then you have that wider variety of potential Kangs. Not sure how wide they'll go though. I'd guess, given the premise laid out in Loki, that only those universes that discover the existence of alternate universes and contact/are contacted are relevant in terms of the multiverse, because if that didn't happen in them, they'd be outside the resulting conflict and not relevant to it. So perhaps that might restrict things to a more limited range of Kangs if the relevant scope of the multiverse is constrained like that.
(Of course if there are infinite universes, arguably it'd be impossible for any given universe to not be contacted by another universe, since there would have to exist a universe that contacted it, but simultaneously there would have to exist a version of that same universe that isn't contacted, even though it would have to be. It's probably a quantum thing).