The correct answer is D. strolling around the lake
Step-by-step explanation:
A modifier refers to a word or set of words that modify or describe a noun, for example, a person, object, place, etc. Additionally, a dangling or misplaced modifier occurs as the noun modified is not clear because the modifier is not placed beside it which causes the modifier to be dangling or misplaced and makes sentence unclear.
In the case of the sentence, "We saw a graceful willow tree strolling around the lake" the dangling or misplaced modifier is "strolling around the lake" because these words have been separated from the noun they modify which is "we" and this leads to an unclear sentence as it is suggested the willow tree was the one strolling and this makes no sense.