The former. He was involved in the altercation, injured, captured, and then died (from the injuries sustained) while the authorities were transporting him to the AG offices.

The article doesn't say or speculate. The article goes on to say the following (my emphasis added in bold):

El Neto", whose full name was Ernesto Alfredo Pinon de la Cruz, was tracked down by intelligence forces in the city of Ciudad Juárez on the U.S. border, and then shot after a pursuit, officials said.

"He was located, chased. He was injured, but on the way (to the state attorney general's offices) he died," Chihuahua state governor Maru Campos said on Twitter.

"El Neto", a top gunman for the "Los Mexicles" cartel, escaped with 29 other inmates after raiders in armored vehicles attacked the prison in the border town of Juarez early on New Year's Day.

At least 19 people, including guards and other prisoners, died in the assault, one of Mexico's bloodiest prison raids in recent years, authorities said.

For those that can't access the link: An escaped Mexican cartel kingpin known as "El Neto" died after a shootout early on Thursday, four days after he fled prison in a violent mass break-out, authorities said.