This accurately describes what's flawed by Chandha's response. Schmidt provides a criticism of a particular way of enforcing homeownership property rules (enforcing by reporting neighbors' violations). But Chandha interprets this criticism as a criticism of the homeownership rules themselves. That's why she brings up the negative consequences of not having the rules. This response isn't a persuasive rebuttal to Schmidt because it doesn't engage with what Schmidt actually argues.

Chandha doesn't comment on Schmidt's motivation for making his argument. She never says, for example, that Schmidt wants to hide his own violations.

What Chandha actually does is confuse Schmidt's criticism of one way to enforce rules (encouraging reports of neighbors' violations) with a criticism of having the rules. So (C) is wrong on two counts.

First, since Schmidt doesn't actually criticize the consequences of having the rules, there is no "criticism of having a set of rules" to confuse.

Second, Chandha mistakenly thinks Schmidt's criticism is a criticism of having rules. But she doesn't think Schmidt's criticism is of "detailed provisions" of the rules. In order for Chandha to make this confusion, she would need to respond in a way that relates to specific provisions (e.g., the colors allowed for one's house, the length of grass on one's lawn, etc.).

Chandha points out that a single homeowner "could" degrade the appearance of an entire neighborhood. But she doesn't assume that this will always happen without homeownership rules. There's nothing logically flawed about arguing against a policy by pointing out negative consequences that might occur.

Chandha's response doesn't relate to the consequences of bad feelings among neighbors. Rather, it brings up the consequences of not having homeownership property rules. So we have no reason to think Chandha confused anything with what results from bad feelings among neighbors.