It looks to me as if the explanation paragraph following the reference to BoL has got sucked in from some other explanation, as it certainly has no connection with this question. Also, the wording of the possible answers is horrible and could easily have been fixed by changing "where" to "last" and sticking a comma in front of it.

At first I thought I would have to rack my brains and remember how nulls are treated by ORDER BY, but then I noticed that there were only two options with 7 rows and neither of them had NULL as the last d value, so the ordering of nulls was irrelevant after all and it was actually a no-brainer question.