The theater company publicly recognized the

Dear gmatgambler
I'm happy to respond.

This is a strange and intriguing SC question. What is the source?

Choices (A) & (B) are grammatically correct, but the passive construction makes them very indirect and awkward. There is no way either of these would be correct on the GMAT.

For the other three choices, we have a clause modifying the word "effort." On the GMAT, we can never drop the word "that" beginning such a modifying clause. Choices (C) & (E) would work in colloquial conversation, but they are too informal ever to be correct on the GMAT.

This leaves (D), which has the proper "that", but unfortunately, it has a strange present tense verb, "devote," and it also a bit longer and wordier than one would typically see on the GMAT SC.

Strictly applying the standards of the GMAT SC, none of the five answers is perfectly acceptable. This strikes me as a faulty question. Beware: the web is littered with very low quality GMAT SC practice questions, most of them free. Don't assume a practice question is of strict GMAT quality just because someone out there has the temerity to call it a GMAT practice question. I would say the best version of this sentence would be something along these lines:
The theater company publicly recognized the effort that the designers devoted in creating such unique set.

Here's a much high quality GMAT SC practice question:
https://gmat.magoosh.com/questions/3221

Does all this make sense?
Mike