The following is from MGMAT Cat#5. I am interested in knowing why the noun modifier "a policy that would likely dissuade those parents" is appropriate. I understand why "which" is not correct but my initial thought is that this would be a run on sentence with the clause "a policy...". Can someone please provide the grammatical reasoning for why it is appropriate?

State lawmakers are considering a law allowing children of divorced parents as young as seven to choose the parent with whom they will live, which will likely dissuade those parents from disciplining or punishing their children.

A) allowing children of divorced parents as young as seven to choose the parent with whom they will live, which will likely dissuade those parents
B) that would allow children as young as seven whose parents are divorced to choose the parent with whom they will live, a policy that would likely dissuade those parents
C) that would allow children of divorced parents as young as seven to choose the parent that they will live with, a policy that will likely dissuade their parents
D)allowing children as young as seven whose parents are divorced to choose the parent who they will live with, likely dissuading those parents
E)that will allow children as young as seven with divorced parents to choose which parent with whom to live, a policy likely dissuading their parents