The entire passage is focused on the issue that the Shelley Court applied the Fourteenth Amendment in a case where, perhaps, it should not have been. It is made clear in the passage that this amendment has been applied to state actors, but not individuals.
Lines 19-22 clearly ask where the state's involvement was in order to apply the Fourteenth Amendment to a matter that involved only private contracts. This is why answer choice B is correct. It brings up the issue/confusion with the court's decision to use this amendment to a case in which state actors were not involved.
I hope this helped. Please let me know if you have any other questions!