This sentence needs the reader to understand the advantage between serging SRG, single-needle sewing SNW;
Advantage is 'that seam allowance is overcast while sewing' rather than '(that seam allowance is overcast) in a seperate process which inturn requires deeper seam allowance'

Now to paraphrase the sentence,
the advantage of SRG over SNW is that SAOC in the process of sewing rather than in a seperate process.

A - incorrect as it misses 'in' which is required as we are comparing activities in SRG and SNW
B - Correct
C - is like comparing 'overcast'ing with seperate process
D - ditto
E - wordy although 'in' is present in the option.

comparison of needles positions in two separate processes here.
B fits perfectly well. 'in' is a proper usage and rather than is preferred.