The subjunctive mood is correctly used in D, that is, in "I demand that they be punctual". In this case, the subjunctive is used because the meaning is close to the unrealness, that is, the speaker believes that for them to be punctual is almost impossible.
The subjunctive mood consists, in this case, of the verb "to demand" and the past subjunctive mood. They mean the present time but they refer to impossible situations or situations that the speaker believes to be unlikely to happen.
