I believe it is the third option but it could be the fourth.
It appears to be first-person limited, because the narrator is speaking from their perspective and know only their thoughts and memories.
Answer: They themselves felt justified in what they had done, so when they were accused they probably felt more offended because they thought they did the right thing. There also is the side that after hearing about Hero’s death they felt remorse. As for the challenge the prince was not really apart it so he was only affected by the loss of a good friend. Claudio’s pride told him he was right in what he did so he was going to defend his choice. This shows that they had conflicted feelings because they were right yet the girl had died.
And then we celebrated the birth of my baby brother all night.