The reason many people consider the Mediterranean island to be ungover

Consider another example in which we get a cause and an effect.

1) The reason Tim got fired is that his kids convinced him to spend all day playing World of Warcraft.

What's the reason Tim got fired? That his kids convinced him to play a computer game all day. It was an action that got him fired, and the word "that" communicates to the reader that we're about to get a clause containing this action.

However, if you remove "that" and put a noun in its place, the noun itself will appear to be the cause. For example:

The reason Tim got fired is his kids convinced him to play World of Warcraft with them.

Now, because we've removed "that," it sounds as though "his kids" caused Tim to get fired, when, in actuality, it was an action -- playing the computer game -- that was the culprit. This isn't wrong, necessarily, and if you reread the sentence, you can figure out what's going on, but it isn't as clear or logical as the first example.

Take another look at (B):


In this version, it sounds as though "the inhabitants" themselves are the cause for why the island is ungovernable. But that isn't quite right -- it's what the inhabitants did, namely learning to distrust and neutralize laws, that's the culprit. Because (D) contains "that," it's crystal clear that the action is the problem, rather than the actual inhabitants.

Moreover, as Ajitesh previously noted, the phrase "learned distrusting and neutralizing" is illogical. You can learn to ride a bike. But if you learn riding a bike, it kind of sounds as though you're riding a bike while learning something else, which is both illogical and probably dangerous.

Similarly, "learned distrusting and neutralizing" seems to convey that the inhabitants were "distrusting and neutralizing" as they learned about some other unnamed topic. Again, this makes no sense.

Taken together, (D) is a clear winner over (B).

I hope that helps!