[c] Is unsigned integer subtraction defined behavior?

Well, the first interpretation is correct. However, your reasoning about the "signed semantics" in this context is wrong.

Again, your first interpretation is correct. Unsigned arithmetic follow the rules of modulo arithmetic, meaning that 0x0000 - 0x0001 evaluates to 0xFFFF for 32-bit unsigned types.

However, the second interpretation (the one based on "signed semantics") is also required to produce the same result. I.e. even if you evaluate 0 - 1 in the domain of signed type and obtain -1 as the intermediate result, this -1 is still required to produce 0xFFFF when later it gets converted to unsigned type. Even if some platform uses an exotic representation for signed integers (1's complement, signed magnitude), this platform is still required to apply rules of modulo arithmetic when converting signed integer values to unsigned ones.

For example, this evaluation

signed int a = 0, b = 1;
unsigned int c = a - b;

is still guaranteed to produce UINT_MAX in c, even if the platform is using an exotic representation for signed integers.

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