The correct answer is B) The existence of slavery in the South.
The institution did Tocqueville see as an important exception to America’s egalitarianism was the existence of slavery in the South.
Alexis de Tocqueville was a French sociologist interested in political studies who traveled to the United States to research the operation systems in American prisons but ended up broadening his research to different aspects of American society.
He was very impressed with what he saw regarding the economic and political stability of the United States and its democracy. Indeed he ended up publishing a book in 1835 called "Democracy in America."
However, the institution that Tocqueville saw as an important exception to America’s egalitarianism was the existence of slavery in the South.