Let us analyze the synchronization code:
Mutual Exclusion:
Initially, varP = false and varQ = false.
Suppose Process X sets varP = true. Before evaluating its while condition, a context switch occurs to Process Y.
Process Y sets varQ = true.
Now, Process X checks while(varQ == true), which evaluates to true, so X enters the while loop body and thus the Critical Section.
Simultaneously, Process Y checks while(varP == true), which also evaluates to true, so Y enters the while loop body and thus the Critical Section at the same time.
Therefore, mutual exclusion is not guaranteed.
Deadlock:
Neither process can be blocked in an infinite busy-wait loop because there are no loops without exit conditions or blocking waits; the loop is entered only if the condition is true and immediately resets the flag inside, or skipped if false.
Hence, deadlock is prevented.
Thus, the proposed solution prevents deadlock but fails to guarantee mutual exclusion, which matches (A).