Answer C

Both password hash sync and pass-through are enabled, no password change in the question, just login

Only on-premises domain to the internet is lost

User1 and User 3 are users that will log in with their hash in AAD, User3 is an AAD guest will log with his own credentials created guest on AAD, so IMHO answer must be C

Pass-through Authentication does not automatically failover to password hash synchronization. To avoid user sign-in failures, you should configure Pass-through Authentication for high availability.

The password hash synchronization process runs every 2 minutes.
When a user attempts to sign into Azure AD and enters their password, the password is run through the same MD4+salt+PBKDF2+HMAC-SHA256 process. If the resulting hash matches the hash stored in Azure AD, the user has entered the correct password and is authenticated.