Okay, I was unaware of this limitation (though I have no idea why anyone would ever even WANT to do a differential backup on master!), so I guess I learned something.
But the phrasing of the question is poor. I assume the intention was to ask which system database can be backed up full but not differential, but the phrasing only included the inability of differential backups. And that means that tempdb is a valid answer as well, since tempdb doesn't allow backups of any kind.
Steve, if you're reading this - my suggestion is to change the wording of the question to "Which of the following system databases does allow full backups, bot does not allow differential backups."
Hugo Kornelis, SQL Server/Data Platform MVP (2006-2016)
Visit my SQL Server blog: http://sqlblog.com/blogs/hugo_kornelis