A is the correct Answer. D is not correct because partner admin may have View Encrypted Data permission.

Anonymous, it says "the package" so obviously it means the managed package from the question...
D will also work because classic encrypted fields are masked and the support representatives can be assigned the View Encrypted Data permission so they will see it and parters won't, and it can be used in code (on system mode). but this isn't the pupose of encryption, fls should be used instead

D seems right as A does not mention whether it's managed/unmanaged package.
https://help.salesforce.com/s/articleView?id=sf.cs_schema_settings.htm&type=5

Protected custom settings in an unmanaged package behave like public custom settings. Make sure that secrets, personally identifying information, or any private data are stored in protected custom metadata types that are installed as part of a managed package. Outside of a managed package, use named credentials or encrypted custom fields to store secrets like OAuth tokens, passwords, and other confidential material.

A. Store the value in a text field on a protected custom setting in the package.

If Privacy for a custom setting is Protected and the custom setting is contained in a managed package, the subscribing organization can’t edit the values or access them using Apex.
https://developer.salesforce.com/docs/atlas.en-us.apexcode.meta/apexcode/apex_customsettings.htm#

Option A is correct - https://help.salesforce.com/s/articleView?id=sf.cs_schema_settings.htm&type=5

https://help.salesforce.com/s/articleView?id=sf.cs_schema_settings.htm&type=5

When a custom setting is contained in a managed package, and the visibility is set to Protected, access is allowed only through the Apex code that is part of that managed package. Subscriber organizations can’t directly access, read, or modify the protected custom settings.