I doubt that you would ever find a question like this on the GMAT, as all 4 wrong answer choices have the same mistake. This would be a good example of a non-idiomatic use of conjunctions as well as a sentence which contradicts itself.
Though all competitive exams do not allow using a calculator, but where they are permitted, there are restrictions on the models allowed.A. Though all competitive exams do not allow using a calculator, FALSE1. The original sentence begins with though which implies that a contrast is coming. Following this with "but" which in itself implies a contrast is non-idiomatic and always wrong. The sentence is implying a contrast to an already implied contrast.
2. The sentence is also illogical as it explains that a calculator is never allowed in competitive exams. Then the sentence goes on to contradict itself by saying "but where they are permitted" implying that the extreme of the word "never" is false.
B. Though all competitive exams do not allow calculators, FALSERepeats mistakes 1&2
C. Though using the calculators is not allowed in all competitive exams, FALSERepeats mistakes 1&2
D. Not all competitive exams allow the use of a calculator, CORRECTMistake 1 is corrected by removing the word "though" and never removing the double contrast issue.
This sentence also solves mistake 2 as it has a different meaning. It does not say calculators are never allowed. Instead, the sentence explains that "not all" exams allow a calculator. This does not exclude that some exams may allow a calculator
E. Every competitive exam does not allow using of calculators, FALSEThis answer choices did not make mistake 1 as it removed the word though, however the sentence replaces though with "every". This word is an extreme word and leads to the second mistake. The first half of the sentence states that something never happens while the second half contradicts this.