Paleontologist Stephen Jay Gould has argued that many biological traits are not the products of natural selection, favored
due to their enhancement of reproduction or survival, but that they are simply random by-products of other evolutionary developments.
Option Elimination - It's a bit of a crazy question, especially for non-native English speakers. So, have some patience, and please bear with me. Apologies for the long explanation, but I hope it helps.

First, a quick refresher on the usage of "due to, "because of," and "because."
"Due to" is an adjective phrase that modifies nouns or pronouns. It is used to explain the cause or reason for something. It is recommended to use "due to" only
1. when it directly follows a form of the verb "to be" (e.g., is, are, was, were) AND
2. modifies a Noun.
Eg. The cancellation (NOUN) of the event was due to bad weather. The "Due to" adjective phrase modifies the noun "The cancellation" and explains the reason for "bad weather."
"Due to" is correct if the sentence makes sense when you replace "due to" with "caused by." If it does not, then "due to" is incorrect.
"Because of" is a prepositional phrase that functions as an adverbial. It explains an ACTION or the reason for an ACTION.
Eg. The flight was delayed because of heavy traffic. Here, "Because of" explains the action of "delay," and the reason was " heavy traffic."
"Because of" is followed by a noun, noun phrase, or a gerund to indicate the cause. It is not followed directly by a subject and verb.
"Because" is a subordinating conjunction to introduce a subordinate adverbial clause.
(A) due to their enhancement of reproduction or survival, but that they are - Here, we need "because or because of " as we are trying to explain the action "are not the products." Moreover, why use that, as we don't have that in the sentence earlier? "They" is just repeating "biological traits" - not required.
(B) due to the reproduction or survival they enhance, but they are - the same issue.
(C) because they enhance reproduction or survival, but - This requires a bit more depth. First, it uses "because" - ok. The problem arises with the use of but. "But" is typically used as a coordinating conjunction on GMAT. It is not that in general English, we can't use "but" as a preposition; we can. E.g., Everyone was invited but John or No one but him knows the truth. But this kind of usage is rare on GMAT. Now, if we look at this question, the format after the relative pronoun "that." We have a clause (many biological traits are not the products ..blah blah), ed verbal modifier to modify the noun "the products" (favoured because they blah blah), a prepositional modifier (but simply random by-products of other evolutionary developments). The problem is twofold. First, the prepositional modifier can modify a noun, or it can be adverbial (modifying the main subject + verb). So technically, it can ambiguously modify the same noun as "ed verbal," i.e., "the products," or as an adverbial "it can modify" biological traits are." Second, the use of "but" as a preposition on GMAT is rare (and maybe it's because of the hell lot of ambiguity it causes as it has caused here). So to avoid this, we need to use "but" as coordinating conjunction and we need verb after "but." I know it's not a 1+1=2 kind of simple, straightforward explanation, but the question is also not simple: 1+1 =2 types.

(D) because they enhance reproduction or survival, but are - Finally. Here it is. Yes, this is correct.
(E) because of enhancing reproduction or survival, but are - "Because of" is followed by a noun, noun phrase, or a gerund to indicate the cause. It is not followed directly by a subject and verb. But the challenge here is that "enhancing" is not a gerund-like acting as a Noun or doer. Enhancing is just an ING verbal modifier. We need a noun or a gerund after "because of." "they" would have solved the purpose, but we don't have it here. I know. This is too much. Even after giving us the right option, GMAT still wants to ensure that we didn't get option D just by some guesswork. We need to earn it.