The main characters are rewarded for their choices.
Explanation:
The holy man rewards the main character and narrator of the Story of Baba Abdalla for his choices. The Magic Prison story prince Harweda gets locked in a house where the windows shrink and he is set free thanks to his non-greedy choices.
The similarity between The story of Baba Abdalla and The magic prison is that the characters in both are blinded, sort of. Baba Abdalla gets blinded because of his greediness, and prince Harweda, of the second story, gets locked in a house where the windows shrink when he stares himself too much at a mirror, leaving him completely in the darkness, unable to see. The windows grow again when he starts caring for something else besides him, a bird, and so he can see again and is liberated when he learns the lesson and stops being selfish. In The Story of Baba Abdalla, he remains blind.
This means the line "The sounds of water splashing and laughter echoed in the distance; Tim's friend's had gone for a late-night swim." is the phrase that is the correct answer, since it talks about the happy actions of Tim's friends.