Answer: The sentence in which "but" is used as a preposition is B. We discovered that Candy will do anything but work.
Step-by-step explanation: A preposition is a word used to express a relation between two elements in the sentence. Although "but" is mainly used as a conjunction, it can also be used as a preposition. In sentence B., "but" is functioning as a preposition and its meaning is "except"; therefore, what the speaker is trying to say is that Candy will do anything except work. In contrast, in options A., B. and C., "but" has been used as a conjunction.