The current version of Ikezu-ishi contains both the original Cairn 2e SCARS but also implements WOUNDS from Block, Dodge, Parry. 

I like Wounds because BDP does a great job of having Light, Severe, and Permanent wounds impact Inventory, especially when including player agency on similar wounds - increase existing or lose another slot? This very much plays into Cairn as a system about Fatigue Management, where wearing yourself limits your inventory and pushes you closer to that 0 HP punishment.

Where Wounds can be a bit more dynamic and lend themselves to the story and Warden/Guide's discretion, Scars are a lot more structured, there's a clearly defined way to gain one (if damage reduces HP to exactly 0, check table) and a clearly defined outcome (usually penalty plus die-roll to maybe boost attribute or HP). I'm a huge fan of characters learning from experience like particularly harrowing moments and brushes with death that make them better adventurers - stronger, more careful (+HP), a little lighter on their feet, etc. And it's nice to have specific instructions laid out for them for consistency sake, even for a rules-lite game.

So my short-term solution has been to have both as separate and distinct possibilities. But this feels like too much and potentially confusing.

So, is the solution to ditch one, keep 'em the same, or maybe figure out a hybrid approach?

In a hybrid situation, I could see Scars working into Permanent Wounds, defining one way a permanent wound could be gained (0 HP) and  providing a consequence with a potential boon. Or using the Scar entries as a tool for helping players and guides show an in-story cause or consequence of a permanent wound.

I may have just talked myself into a light hybrid where Scars go away...