The correct option about how this sentence should be rewritten to correct the subject-verb agreement error is Bacon and eggs is an all-time American breakfast favorite that satisfies the hungriest krumper. The verb refers to <em>breakfast, </em>that is why it should be singular, not plural.
In order to correct the subject-verb agreement error the sentence should be written like this: Bacon and eggs is an all-time American breakfast favorite that satisfies the hungriest krumper.
Subjects and verbs must agree with one another in number (singular or plural). Thus, if a subject is singular, its verb must also be singular; and if a subject is plural, its verb must also be plural.
In this particular case, the verb refers to breakfast, that is why it should be singular, not plural.
