For rule replacement questions, we are looking to find an answer that has the exact same impact on the game. That is, it's basically a restatement of the initial rule. So, we can start with what the initial rule did.
The initial rule was that 1 is either t or r, but when combined with the next rule, it created two scenarios: either 1 is T, or 1 is R and T is 7. The right answer will recreate this, and this is exactly what E does.