I think the two modes can be available as options in the configuration: How do you want to use the versions inside the TimeLine's events?
1- Mode 1 : using the Project Version (JIRA Version Picker).
2- Mode 2 : As actual (Free Text for Versions) for more planning mode
As an admin user, i want to be able to configure between mode 1 and mode 2.
-The Watchers should receive a notification when the version changes (maybe with a link to the JIRA version Page with all the list of elements in this version)