Tough call. Discs 1, 2, and 3 were all excellent for different reasons (and 4 too, but it's so short that it might as well be considered an extension of Disc 3).
My memory is fuzzy on Disc 2. I distinctly remember the prison opening, then things ramping up with the Gardens going to war, Cid/NORG/Edea revelations, great Squall/Rinoa moments (especially if you select her for your team when the party splits up)... You may be right. Lot of action and great plot moments/revelations on Disc 2.
Disc 1 has the vivid worldbuilding, the SeeD missions, the train chase, the assassination attempt, and the uncompromising characterization of Squall as an isolated jerk who wants to be left the hell alone. People like to s*** on FF8, but you have to give the writers credit for committing to Squall as a heavily flawed character. If FF8 were a Hollywood movie, the screenwriters probably would've shown him rescuing puppies or something in order to soften him and make him "palatable" to a mass audience.
Disc 3 I love for how raw and wildly imaginative it is and for the emotional payoffs of Squall struggling to let his defenses down. People knock him for allowing Rinoa to be taken to the Sorceress Memorial, but that shows how conflicted he is. Even after literally going beyond the ends of the earth for her, he still struggles with his fear of abandonment. Then he needs one more nudge before going after her while this masterpiece plays: