This game only has three rules. And only one of them mentions something impossible: R and W can’t go together in S. So, the right answer has to involve R and W, and somehow place them in S.
This question places students in Machiavellianism. But, rule 3 says anyone in Machiavellianism is also in S.
So, E is CORRECT. If R and W are in M, then they are also both in S (rule 3). This violates rule 2: R and W can’t be together in S.
This diagram illustrates it:


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