I wish there was a third option, a more intelligent one. That is, "if the song's current position is after a certain point, like 00:10, then restart the song, otherwise go to the previous track".

I don't know how others behave, but there is almost no chance that I would want to restart the song right at the beginning of the song, so that third option makes more sense. In fact, the music player I use on Android, Musicolet, has that option.