The correct answer is B. Cloud Infrastructure (Terraform) repository is shared: different directories are different environments. GKE Infrastructure (Anthos Config Management Kustomize manifests) repositories are separated: different branches are different environments. Application (app source code) repositories are separated: different branches are different features.
This answer follows the best practices for using Terraform and Anthos Config Management with GitOps, as described in the following sources:
For Terraform, it is recommended to use a single repository for all environments, and use directories to separate them. This way, you can reuse the same Terraform modules and configurations across environments, and avoid code duplication and drift.You can also use Terraform workspaces to isolate the state files for each environment12.
For Anthos Config Management, it is recommended to use separate repositories for each environment, and use branches to separate the clusters within each environment. This way, you can enforce different policies and configurations for each environment, and use pull requests to promote changes across environments.You can also use Kustomize to create overlays for each cluster that apply specific patches or customizations34.
For application code, it is recommended to use separate repositories for each application, and use branches to separate the features or bug fixes for each application. This way, you can isolate the development and testing of each application, and use pull requests to merge changes into the main branch.You can also use tags or labels to trigger deployments to different environments5.
References:
1:Best practices for using Terraform | Google Cloud
2: Terraform Recommended Practices - Part 1 | Terraform - HashiCorp Learn
3:Deploy Anthos on GKE with Terraform part 1: GitOps with Config Sync | Google Cloud Blog
4: Using Kustomize with Anthos Config Management | Anthos Config Management Documentation | Google Cloud
5: Deploy Anthos on GKE with Terraform part 3: Continuous Delivery with Cloud Build | Google Cloud Blog
6: GitOps-style continuous delivery with Cloud Build | Cloud Build Documentation | Google Cloud

Explanation
The best option for mitigating the incident impact on users and enabling the developers to troubleshoot the issue is to change the selector on the Service app-svc to app: my-app, version: blue. A Service is a resource that defines how to access a set of Pods. A selector is a field that specifies which Pods are selected by the Service. By changing the selector on the Service app-svc to app: my-app, version: blue, you can ensure that the Service only routes traffic to the Pods that have both labels app: my-app and version: blue. These Pods belong to the Deployment app-blue, which uses the previous version of the application. This way, you can mitigate the incident impact on users by switching back to the working version of the application. You can also enable the developers to troubleshoot the issue with the new version of the application in the Deployment app-green without affecting users.

The most effective ways to measure application reliability from a user perspective without making any engineering changes are to create new synthetic clients to simulate a user journey using the application, and to use current and historic Request Logs to trace customer interaction with the application. These methods can help you monitor the availability, latency, and errors of your application from an end-user perspective .