In my view the OA is wrong and many explanations here are unconvincing, answer should be C not B; please let me know why I'm incorrect. My rationales are:
1. there is no parallelism issue for all options, they are all nouns, gerund is a noun, conflict resolution is a compound noun
2. people claim that there is confusion that "worship" applies to resolution; I agree and that's exactly the problem with OA as boldened below
3. the correct idiom should be "used for + v-ing" not "used for + noun", although it is not wrong, just a preference
In conclusion C is the best:
(A) it was often used for entertaining, exercising,
worship and conflict resolution between warring factions.
(B) it was often used for entertainment, exercise,
worship and conflict resolution between warring factions.
(C) it was often used for entertaining, exercising, worshipping and conflict resolution between factions at war.
> list has clear meaning and the last phrase "between factions at war" is the clearest amongst all
(D) they had often used it for entertaining, exercising, worshipping and resolving conflicts between factions who were at war.(E) it was often used for entertaining, exercising,
worshipping and resolving conflicts between warring factions.