This means at least L or M is out, and maybe both are.
Rule 2 says P is in only if it's next to O and S
P - >OPS
What if P is out? Well, if P is out, we already know that L/M is out, and there are only 2 out spaces. This means that both O and S must be in. In looking at the answer choices, we see (B) says O must be in, so (B) is the correct answer choice.
Hope this helps. Let us know if you have any other questions!