The author does not shift between multiple meanings of “environment.” “Environment” throughout the stimulus refers to the surroundings, conditions, and circumstances of a person’s life.

The stimulus concerns responsibility for crime. The distinction between socially acceptable and socially unacceptable plays no role in the reasoning. Even if you believe crime is socially unacceptable, the author does not fail to distinguish between crime and law-abiding actions.

The argument does not deny that one becomes a “criminal” solely by committing a crime. There’s a difference between what gives someone the status of “criminal” (which is what (C) is about) and what causal factors lead one to commit crimes (which is what the stimulus is about).

There is no statistical evidence presented. And, the conclusion is not a generalization from what’s true about a small minority of the population.

In denying the responsibility of criminals, the author uses the implicit principle that one is not responsible for actions that are a product of one’s environment. But the author contradicts this principle when claiming that law-abiding persons are responsible for crime.