#1 is the best choice. However, technically, we should say, “not too well” instead of “not too good.”

FYI, all of these constructions using HONEST are common in the UK but not the US.

#1 and #2 are both used in the US. Many people do answer with "good" instead of "well", even though "well" is technically grammatically "correct", however I don't like to view grammar in terms of "correct". If it's what people say, then that's just how it is!