Final answer:
To clarify the pronoun's antecedent and avoid ambiguity, choice B, 'the animal,' should be used to indicate that the koala became distressed when approached by Diego.
Step-by-step explanation:
The question relates to clarifying the antecedent of a pronoun to avoid ambiguity in a sentence. In the original sentence, 'When Diego approached the koala, HE became distressed,' it's unclear if 'HE' refers to Diego or the koala. The best choice to make the sentence clear is (Choice B) the animal, which unambiguously indicates that it was the koala that became distressed when approached by Diego. This rectifies the confusion without introducing any possible gender assumptions that could come with 'the male' or the vague 'one of them.'