Observation is a very important part of science. It lets us see the results of an experiment, even if they are not the results we expect. It lets us see unexpected things around us that might stimulate our curiosity, leading to new experiments. Even more important than observation is accurate observation. Often, our eyes and our brains play tricks on us, letting us see what we expect to see, instead of what is actually there.
As you said above, the word "bob" means fencing and you want to know how this can have a double meaning related to homophobes.
This is what I see the 2 meanings as:
1. fencing, as in taking out your fencing sword
2. take out your penis, as penis would be another word for sword in plays/books such as the one you're reading - this would be relating to gays if the convo was btwn 2 men
I think the answer is C/ the third option