Why does diluting strong acid increase pH when the reaction is HCl + H2O => H3O+ + Cl-?
Remember LCP?
Dilution will decrease concentration of all species. Even though the subsequent change is to produce more H+, this will only be partial, and [H+] invariably drops.
Another point is strong acids do not behave as if they are in equilibrium, because they are so damn strong you get 99.9999999999999999999999999999999999% conversion, the equilibrium lies all the way to the right by about twenty million billion miles. Thus when you dilute, there is no subsequent change, you just get diluted.
Weak acids tend to bounce back a little, but LCP, the pH still rises.
Also, apologies for the previous confusion. You are right in that I was confused, A is the correct answer.