A GIS administrator is setting up a distributed collaboration between an ArcGIS Online organization and...

A distributed collaboration in ArcGIS Enterprise is designed to operate between two organizations only. Therefore, to collaborate with two separate ArcGIS Online organizations, the administrator must create separate collaborations between the Enterprise org and each ArcGIS Online org.

From Esri documentation:

“Each collaboration is established between two organizations. To collaborate with multiple organizations, you must set up multiple one-to-one collaborations.”

Option B is incorrect because adding external users from other orgs to a group doesn’t extend collaboration capabilities.

Option C is not supported — collaborations are strictly between two parties.