Which of the action-reaction pairs is it,the 1st or 2nd, or is it
both? If it's both then does that mean that there are two
action-reaction pairs in rocket propulsion?
To see the first, consider an inflated balloon. Within it, there are a large number of molecules bumping around, into each other, and into the sides of the balloon. Every time they hit the side they impart momentum, but within some microscopically short time, so does another molecule on the other side going the other direction. So macroscopically, there's nothing except for a net outward force.
Now poke a hole in the balloon. Suddenly the molecules going "that way" no longer deposit their momentum on the balloon, but their opposite partners on the other side of the balloon still do. So now you suddenly have a net force opposite the hole. And because the molecules randomize on the order of nanoseconds, this process continues until it deflates.
The second side is where rockets are not like balloons. More specifically, the combustion chamber of a rocket engine is similar to the balloon, it's roughly spherical-ish and has a hole in one end. However, rockets also have a nozzle, or engine bell, on the other side of the opening:
The bell has the duty of directing the escaping molecules toward the rear. Recall that the gasses randomize their motion on the order of nanometers. So as soon as the molecules going out the hole get past it they're starting to randomize their motion again. So think about one molecule that gets bumped so it starts travelling away at 45 degrees. At some point it is going to hit the bell, so what you want to do is shape the bell so that when a molecule going 45 degrees hits it, the side of the bell is 45 degrees, so it reflects off and is now going straight rearward. That way you get the maximum amount of momentum forward. Now if you consider the angles that do that perfect reflection for any given angle of molecule leaving the combustion chamber, you get a bell.
Ideally you want to produce a flow of gas that is entirely to the rear. However, those molecules are also bumping in the air around it, so some of that energy is being lost to the atmosphere. This is why engines are invariably more efficient in space. Additionally, if you consider the effect of the air on the flow, it tends to randomize it, meaning there will be more sideways component. This means the angles of the bells will have to change to account for this, which is why the engine bell on a rocket designed for low altitude is wider than the ones for high altitude. There are some designs that change their geometry to get the most at any altitude, but they have not been widely used operationally.