As the Developers start work during the Sprint, they realize they have selected too much...

 This is the best answer because it respects the Scrum values of openness, commitment, and focus. The Developers should be transparent about their progress and collaborate with the Product Owner to adjust the Sprint scope accordingly. The Product Owner is responsible for maximizing the value of the product and the work of the Developers, so he or she should be involved in any decisions that affect the Sprint Goal and the Product Backlog. References:

Scrum Guide, page 10: “If the work turns out to be different than the Developers expected, they collaborate with the Product Owner to negotiate the scope of Sprint Backlog within the Sprint.”

Scrum Guide, page 11: “The Product Owner is accountable for maximizing the value of the product resulting from the work of the Scrum Team.”