I don't have my 2012 rule book yet, but if what you quoted from it is exactly what appears then they must have at least revised the format.
As for the test question, you can toss out B & C since the base umpire has the tag up with only one runner on second. That just leaves the question, "Who has the play at third?".
I always took the phrase "on fly ball advancement" to mean specifically if it is a caught fly ball and tag up, as opposed to a runner advancing on a base hit-type fly ball. If you have an active, "unretired" batter-runner running the bases, wouldn't you want the base umpire to have his attention on him? Whereas, if the batter-runner was out on the catch, all the base umpire has to do is slide over a few feet to cover the play at third, with the plate umpire staying home in case the play develops there.
Not having seen the 2012 manual, I would have to say the answer is D.
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