I *knew* when I saw the answer options that there would be a possible source of confusion here.
Yes, the insert into the second table will fail. But that insert is not batch-aborting. The second select will still run, and because the insert has failed, it will return an empty set.
The answer is: "How many rows are returned from the selects listed above?" (emphasis mine). The only correct answer is 2,0, since the number of rows returned by the second row is not equal to "error" (which is not even a number), but "zero".