The AEIOU theory is a model that stresses effective communication as a way of dealing with conflict; each of the letters stands for one communication behavior: Acknowledge Express Identify Outcome Understanding
"Her husband drew the talisman from his pocket, and all three burst into laughter as the Sergeant-Major, with a look of alarm on his face, caught him by the arm."
The answer is the last one, D. All of the other transitions indicate that the writer will either go into further detail on the subject or list other reasons as to why this would be correct. However, D clearly uses a contrasting transition to introduce a new argument.
You must pick 2 main clauses in this example. The second one form the top is the one you should choose.