I believe this is why Phase C was proposed:
Users with frozen quantum vulnerable funds and a HD wallet seed phrase can construct a quantum safe proof to recover funds.
This phase is designed to preserve trust in Bitcoin by ensuring that users don't permanently lose access to their funds.
I think phase C should be mandatory rather than optional, as it provides a safeguard that maintains the network's trustworthiness while addressing quantum vulnerabilities.
I think Phase C or a better variant of it should be mandatory as well if the community agreed to go along with this proposal. But there is a big problem and it's mentioned in the part that you quoted. The recovery proposed would only work for wallets with HD wallet seed phrases. This excludes satoshi and satoshi-era coins. They would remain unspendable even if Phase C became mandatory. In those days we didn't have HD (Hierarchical Deterministic) seed phrases. You needed a backup of each individual private key whose address you used.
That private key alone wouldn't be enough proof that you are the legitimate owner of that bitcoin because a quantum computer could also brute force that same key. And Bitcoin doesn't care.