I think the better choice for town is to let both claimed cops live. Mafia knows which one of them is real, and they'll kill accordingly. It also gives both of them more chances to investigate. Not only that, they can more-or-less determine their sanity via successive investigates.
However, this means that we may have to let both of them live for more than one day. This is to shut off the possibility of mafia killing off one (who comes up cop) to throw suspicion onto the second cop for town to lynch. And yes, I am assuming that we have a 2 cop scenario as I find this most likely. If we had a doc, Originality probably wouldn't have died.
For the record, if I had to choose, I would say Panzer is more likely to be the one fake-claiming simply because scotmany12 was hinting at cop far before Panzer was.