Noun modifier exception Touch rule

It is called a sea, but the landlocked Caspian is actually the largest lake on Earth, which covers more than four times the surface area of its closest rival in
size, North America's Lake Superior.

(A) It is called a sea, but the landlocked Caspian is actually the largest lake on Earth, which covers

(B) Although it is called a sea, actually the landlocked Caspian is the largest lake on Earth, which covers

(C) Though called a sea, the landlocked Caspian is actually the largest lake on Earth, covering

(D) Though called a sea but it actually is the largest lake on Earth, the landlocked Caspian covers

(E) Despite being called a sea, the largest lake on Earth is actually the landlocked Caspian, Covering

This thread tests the use of noun modifier, especially the relative pronoun touch rule. The question is what does the pronoun ‘’ refer to: actually there are four eligible candidates in the text namely – 1. Sea 2. Caspian 3. Lake and 4. Earth. It is crystal clear that which can not refer to earth because it doesn’t give much sense to say that it covers more than four times of its nearest rival. But according to the intended meaning of the text, it is the Caspian which covers more than four times of the surface of its nearest rival. Can the pronoun ‘which’ jump over the earth, the lake and then modify the Caspian? It is too weird to think that a modifier has such a free reign in a sentence to choose its partner at will. Therefore A and B have no legal reason to ignore earth and hence should be rejected as incongruous.
It is here the adverbial modifier (verb+ing) comes in handily for being able to modify a suitable referent anywhere in the previous clause. C is there the right choice under such circumstances.

D‘s sentence construction is ungrammatical. The first part is a complex sentence with a dependent sub-clause and a completed IC. The second part is again an IC but just conjugated by a comma. This is actually a run-on
In E: What is being called a sea? It is the Caspian; therefore Caspian should immediately follow the introducing modifier namely, - despite being called-. Therefore let’s drop it. Add to this muddle, the use of the un-GMATworthy ‘being’ , if you wish