There are so many variables to this that it's hard to advise you. How is your boy's overall health? Can he withstand another serious surgery and rehab? What would his quality of life be with a brace? If the fusion surgery is a viable option, I'd take that. A brace will get old quickly, both for you and for him. But for me, the decision would depend on how active he is now. Is he an old 12 or a young 12?
I have two 12-y.o. littermates that are at opposite ends of that spectrum. One is 12 going on 7, even though she's had multiple surgeries and cancer. Her littermate is an old 12, who had Lyme disease early in life, doesn't hear well now and really just likes to sleep. I would view their surgical options very differently for that reason.
I hope you find the right path for your pup and that he heals well!