In a certain code language, ‘DISTINGUISH’ is written as ‘EHTSJMHTJRI’. How will ‘LABEFACTION’ be written in that language?

Let's study the pattern of DISTINGUISH → EHTSJMHTJRI:
Prepp

D+1=E

I−1=H

S+1=T

T−1=S

I+1=J

N−1=M

G+1=H

U−1=T

I+1=J

S−1=R

H+1=I

The pattern is alternating +1,−1,+1,−1,…

Let's apply this same rule to LABEFACTION:

L+1=M

A−1=Z

B+1=C

E−1=D

F+1=G

A−1=Z

C+1=D

T−1=S

I+1=J

N−1=M

O+1=P (Wait, let's re-verify the options, option A has MZCDGZDSJNO with last letter O? Let's check if the word has 11 letters: L-A-B-E-F-A-C-T-I-O-N = 11 letters.
Let's re-verify the last letters:

I+1=J

O−1=N

N+1=O

So it becomes: M Z C D G Z D S J N O.
This perfectly matches Option A.