I think the key to this question comes down to the sentence on line 35: "Film archives and retrospective festivals often behave as if the production of the films were the only side of the coin."
The author mentions the directors' cuts to illustrate this point. The archives and festivals emphasize authenticity when it comes to production. But when it comes to presentation, "authenticity is allowed to go out the window."
The author is not saying that the directors' cuts are inauthentic - quite the opposite. This is why C is incorrect. Rather, the author is saying that the authentic productions are wasted if they are presented inauthentically. This is best described by D.