Dolphins lack vocal cords, nevertheless creating sounds: a complicated

This is what we get with option B:

Dolphins lack vocal cords, nevertheless creating sounds; they produce a complicated system of whistles, squeaks, moans, trills, and clicks with sphincter muscle inside the blowhole.

The ", nevertheless creating sounds" is wrong for two reasons:
1. It doesn't logically connect to the clause "Dolphins lack vocal cords". Participles used this way normally communicate something that extends what the initial clause communicates. However, here the participle brings us an entirely new idea that does not connect to the initial clause at all (it is actually a contrasting idea). For example:

She did not go to the movie with her friends, choosing to stay at home and study for the GMAT instead.

The instead could make us think that we're looking to introduce a contrasting idea, but even in this case the participle communicates something in the same "direction" as the initial clause "she did not go..."

2. Look at the portion after the semicolon. It is all about the fact that Dolphins can produce sounds. That is, the idea contained in the ", nevertheless creating sounds" bit is central to the intended meaning of the sentence. We should not stick it in a modifier and leave it there. It is more important than that. There is a big difference in terms of emphasis between (a) Dolphins lack vocal cords, nevertheless creating sounds and (b) Dolphins lack vocal cords, but nevertheless create sounds.

Option A: A participle is not appropriate here as it doesn't support the intended meaning. System is singular, but are is plural. The use of the passive voice is generally avoidable and the passive verb are produced by makes it harder for the reader to identify dolphins as the agent (the who or the what that produces those sounds).

Option B: A participle is not appropriate here as it doesn't support the intended meaning. The semicolon brings in a full subject-verb pair and because the "producing sounds" idea is not an integral part of the initial clause, the two clauses joined by the semicolon don't make as much sense anymore (Dolphins lack vocal cords; they produce a complicated system of sounds).

Option C: The best of the 5 options.

Option D: There is no by after produced, and the being makes it seem as if we are discussing an ongoing action.

Option E: But should not be used to join lack (a verb) and creating (a participle).

Finally, although this is marked as a GMATPrep question, I'm not comfortable with the non-underlined portion. Specifically, "with sphincter muscle" doesn't make any sense ("with sphincter muscles" or "with a sphincter muscle" would have been better).