I would have selected B as the ans. The descending thin section of the LOH is permeable to water and urea but not the salts. The ascending thin section is permeable to salts and urea, but not water. So the filtrate is loosing water in the descending thin section because medula is hypertronic than filtrate and then filtrate becomes more dilute in the ascending thin section because it is now loosing salts. The ascending thick section of LOH is permeable to salts but not permeable to water and urea, so once again the filtrate becomes more dilute as it passes through DCT and collecting tubule.
But it seems like the overall effect of the filtrate in the LOH is to make the medulla more hypertronic than filtrate so that water can be reabsorbed. Because there is no water reabsorbtion in DCT and collecting duct. So I guess it makes sense to say that LOH concentrates the medulla.
Let me know I am wrong in my understanding.