The answer to your question would be that the statement about the underlined phrase that is true is the following one: The phrase is a nonessential adjective clause. That is, the correct option would be D.
"Which is often called the Stars and Stripes" is a nonessential adjective clause. As such, it contains a subject and a verb, it is introduced by a relative pronoun or adverb, and it functions as an adjective. As the information it provides is nonessential to the meaning of the sentence, the clause is separated by means of commas. What is more, the clause can be removed without altering the meaning of the sentence.
