The correct answer is …
D. not a problem if the breaker is HACR rated
On the surface you might think that a #10 Cu wire shouldn’t be on a breaker rated more than 30A. But air conditioner circuits are special cases where the typical limitations on the wires dont apply (the equipment has additional internal protection for wires). In addition, the individual wires are typically rated for more than code table limitations.
Model codes specifically state that the feeder wires and breaker should be installed in accordance with the equipment label (e.g. IRC E3702.11 … http://publicecodes.citation.com/icod/irc/2009/icod_irc_2009_37_sec002_par011.htm)
The label states “Minimum Circuit Ampacity - 21.5” and "Max Crt Brk - 35… so the #10 NM-B feeder on a 35A breaker is Okay. But the breaker has to be HACR type per the label.