Carrie has a nice solution above. I'd add that, if you are asked 'how many prime factors does 120 have?', the question normally should be taken to mean 'how many *distinct* prime factors does 120 have?' The answer to that question is three: the only primes which divide 120 are 2, 3 and 5.
The wording in the original question above is very awkward, and I'm curious to know where the question is from - you would never see such wording on the real test, and if all the questions in your book are phrased like this one, it's time to find a better book. s(n) is measuring what is known, in Number Theory, as the 'length' of n - the number of primes, distinct or not, you would need to multiply together to get n. A number like 16 has only one prime factor - 2 - but it has length four, because we need to multiply four 2's to get 16.
You do not need to know what the 'length' of a number is for the GMAT, but there is one question in GMATPrep (I think, or one of the OGs) about this concept - they explain what the 'length' means in the question itself.
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