So I came across this question when I was looking for practices before going in for my CCNA.
I am not quite understanding why host in VLAN1 would not be communicate with each other after the change.
802.1Q uses Vlan 1 as native Vlan by default. Fa0/1 on sw11 would send traffic to the other side untagged because it is an access link and it's sending native vlan (vlan1) traffic as configured by the technician per the question. On the other side of the link Fa0/1 on sw12 is a trunk port. As a trunk port, it forwards all frames based on its destination mac or floods out all port of the arriving frame's tagged vlan header. (as oppose to access port which forwards by configured vlan id). So Sw12 will still end up forwarding frames to hosts connected to the switch.
Sames goes the other way when traffic goes from sw12 to sw11. Frames leave Sw12 untagged which is native vlan1 default and arrive Sw11 as a vlan1 frame. So the answer should be A, "Only host in Vlan 1 can communicate with each other"
Please correct me if I am wrong.