Under hardie or not? - Tile Advice

[Spud 22]

hello. I am installing a new shower/bath. the long edge will be against a finished hardie backer wall and one side edge against a solid concrete wall. what is the best way to tile and seal?. should I cut out the hardie backer so it sits on the bath lip or leave it so bath is flush with the backer and tile over the bath lip. Also does hardie backer need sealing/waterproofing?. Getting conflicting info.. Thanks in advance.

 

[Dave]

Option 2. And no need to tank Hardibacker