RMD007, it's a question of which error is the most significant. In (B), there's a much bigger problem: "the crown jewels of London that were
stole by a famous international cat burglar." "Jewels that were stole" is unambiguously wrong. No grey area there.
But there is grey area when it comes to the difference between an
essential modifier ("that") and a non-
essential modifier ("which"). It's basically a judgment call in most cases -- it's hard to know exactly which one is intended by the author, and it's therefore really hard for the GMAT to test the difference between "that" and "which." Here's a silly example:
- The restaurant, which serves delicious bhindi masala, is outstanding.
- The restaurant that serves delicious bhindi masala is outstanding.
Sure, these mean slightly different things: in the second one, you presumably wouldn't know which restaurant I was talking about unless I mention the bhindi masala. But there's no way to know which sentence is right and which one is wrong -- they're both fine. So you're unlikely to see this as a crystal-clear determining factor on an actual GMAT question.
Mmm... bhindi masala.