Version Created Using B:

Affording strategic proximity to the Strait of Gibraltar, Morocco was also of interest to the French throughout the first half of the twentieth century because they assumed that without it their grip on Algeria would never be secure.

In this version there are three singular nouns before it, the Strait of Gibraltar, Morocco and the first half of the twentieth century.

There is one after it, grip on Algeria.

Given that grip on Algeria comes after it and since if it were to refer to grip on Algeria the sentence would have a nonsensical meaning, we know that it does not refer to grip on Algeria.

Of the three singular nouns before it, the only one that makes sense as the antecedent for it is Morocco. the Strait of Gibraltar is just part of a modifier modifying Morocco, and one can easily tell that the sentence is not conveying that without the first half of the twentieth century the French assumed that their grip on Algeria would not be secure.

So in the version created using B, structure and meaning clearly indicate that it refers to Morocco.

Version Created Using C:

Affording strategic proximity to the Strait of Gibraltar, Morocco was also of interest to the French throughout the first half of the twentieth century because they assumed that their grip on Algeria was not ever secure if they did not hold it.

In this version both Morocco and grip on Algeria come before it, and I think that you can tell that which one is the referent for it is not clear.

The meaning could be that they assumed that their grip was not secure if they did not hold Morocco or that they assumed that their grip was not secure if they did not hold their grip. While, yes, the former meaning makes more sense, the sentence does not clearly convey it.

The pronoun ambiguity issue in E is basically the same as that in C.