The rule in passage B is that if a rational being acts immorally, it’s acceptable to repay that immoral act in kind. So the rule hinges on whether or not the original act was rational or not. It doesn’t matter whether the payback behavior is rational. (A) would be correct if it simply said that pathological behavior is irrational. That’s what (B) says.

The rule in passage B is that if a rational being acts immorally, it’s acceptable to repay that immoral act in kind. So the rule hinges on whether the act stems from a rational source. (B) says that for pathological behavior, we don’t have a rational source. This means that in the case of a pathological liar, the rule doesn’t apply. So there’s no contradiction between this rule and the scenario in passage A. They’re compatible.

This makes the rule in passage B and the suggestion in passage A less compatible. The rule in passage B is that if a rational being acts immorally, it’s acceptable to repay that immoral act in kind. So the rule hinges on whether the act stems from a rational source. (C) says pathological liars should be treated as rational, meaning the rule applies to the scenario in passage A. But this means it should be acceptable to repay pathological liars with lies, which contradicts author A’s suggestion that just because a pathological liar lies, that doesn’t make it acceptable to lie back to him.

The rule in passage B is that if a rational being acts immorally, we have the right to repay that immoral act in kind. Adding in (D) just means that if a rational being acts immorally, we have may or may not have a duty to repay that immoral act in kind (because a right isn’t equivalent to a duty). This doesn’t bring us any closer making the rule compatible with the suggestion in passage A (the suggestion being that just because a pathological liar lies, that doesn’t make it acceptable to lie back to him). As far as we know, given (D), the rule still gives us the right (if not the duty) to lie back to the pathological liar.

The rule in passage B is that if a rational being acts immorally, it’s acceptable to repay that immoral act in kind. Adding in (E) just means that repaying that immoral act in kind will lower one’s standards. But the rule still tells us that doing so is acceptable. This doesn’t bring us any closer making the rule compatible with the suggestion in passage A (the suggestion being that just because a pathological liar lies, that doesn’t make it acceptable to lie back to him). As far as we know, given (E), the rule says it should still be acceptable (if low in standards) to lie back to the pathological liar.