Be careful, this is not exactly accurate. The low PaO2 is accompanied by a rise in PCO2, which is how the central chemoreceptors become desensitized, not specifically the low PaO2. I say be careful because all practice questions I've seen involving this topic have both choices as possible answers.
Interestingly, the more recent understanding is that the loss of hypoxic drive is not the most important mechanism for acute worsening of hypercapnia & hypoxemia when 100% O2 is given in acute COPD exacerbations. Too much O2 causes shifting of the CO2-Hgb dissociation curve to the right (Haldane effect), so more CO2 dissolves in the blood. More importantly, supplemental O2 removes reflex hypoxic pulmonary vasoconstriction in poorly ventilated areas, which causes a large increase in intrapulmonary shunting & worsening of the V/Q mismatch.
I don't know how relevant those two mechanisms are to Step 1, since I haven't come across them in any review resources, but it might be good to have in your back pocket in case you get a relevant question but don't see a choice related to hypoxic drive.