The key question is why 'which means' is not allowed here.
There is something we need to settle before the proof:
the main structure of the sentence is: (according to choice A D & E)
not all...mechanisms]--[that have ...effect], --[that is],---[that screen out...],----[are]--[unlawful]
(subject)----------------(1st relative clause)----(parenthesis)-(2nd relative clause)---(be)---(predicative)
there are two parallel relative clauses modifying the subject, namely 'mechanism'.
'that is' is a parenthesis, and it connects two relative clauses.
'that is' = 'that is to say'
and 'that' here refers to the 1st clause.
it means, we can express the meaning of the 1st clause in another way, namely by the 2nd clause
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The formal proof of why 'which means' is not allowed here.
Suppose: using 'which means' is allowed here.
claim 1: 'which means' is not a parenthesis.
proof of claim 1
'which' is an interrogative pronoun, not a demonstrative pronoun.
so 'which' cannot refer to the first relative clause.
And we have to regard 'which' as an relative pronoun, which refers to a noun mentioned before, and marks a relative clause.
end of the proof of claim 1.
Therefore, the clause 'that screens out....' is a objective clause, performing as an objective for 'which means'
So 'which means, that screen out....' is a relative clause as a whole, modifying the noun 'disparate effect'.
based on the meaning of the clause 'that screen out...', we know its logic subject is 'mechanism', which is refered to by 'that'.
But 'that' cannot refer to 'mechanisms', because, 'mechanisms' are plural, while 'that' is single.
(here we are no longer dealing with a relative clause, but a objective clause)
We have to use 'those' to refer mechanism.
We we run into a contradiction.
So the supposition that 'which means' is allowed here is false