Answer :
The right answer for the question that is being asked and shown above is that: "D. They are honest men who have stayed awake all night." The author of "Ooka and the Honest Thief" make clear when the guard and the rice store owner will not admit to falling asleep is that They are honest men who have stayed awake all night.
I also think that the right answer is D. They are honest men who have stayed awake all night. Due to the original source of "Ooka and the Honest Thief" the author reveals guards like hardworkers and honest men that never leave their post. So this is the way that lead me to that answer.