The correct choice is Only data transferred out to the public internet is charged.

Inbound data that arrives from the internet into an AWS Region is generally not billed and AWS bills for data that leaves a Region to the public internet. Egress is priced on a region specific, tiered basis and the effective cost depends on volume and destination so you should design to minimise unnecessary outbound data when possible.

Neither inbound nor outbound data transfer is billed is incorrect because outbound traffic to the internet is typically chargeable.

Both inbound and outbound data transfer are billed at tiered rates is incorrect because inbound data from the public internet is generally free and only outbound is commonly billed.

Only inbound traffic into a Region incurs charges is incorrect because the billed direction is outbound to the internet and inbound is usually not charged.

Full AWS Practitioner Certification Question