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A. Though looking less distinctive than many of their highly sought-after purebred counterparts, mixed-breed dogs, born from genetically disparate parents - mixed-breed dogs doesn't have a verb even after the hyphens

B. Though mixed-breed dogs, born from genetically disparate parents, look less distinctive than their highly sought-after purebred counterparts - Seems fine when put in the sentence

C. Though they look less distinctive than many of their highly sought-after purebred counterparts, mixed-breed dogs, born from genetically disparate parents - Same as (A)

D. Born from genetically disparate parents, mixed-breed dogs look less distinctive than many of their highly sought-after purebred counterparts - Doesn't seem any grammatical error but it doesn't have a contrast as depicted in original sentence using though

E. Mixed-breed dogs, born from genetically disparate parents, though they look less distinctive than many of their highly sought-after purebred counterparts - No verb for Mixed-breed dogs

(B) is the correct answer.
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