The most likely answer is C. The pen batteries need recharging.
An active touch pen is a stylus that uses a battery to power features such as pressure sensitivity, buttons, or Bluetooth connectivity. If the pen batteries are low or depleted, the pen may stop working or become inaccurate1. To fix this issue, you should recharge the pen batteries using the provided charger or cable, or replace them with new ones if they are not rechargeable1.
The other options are less likely to cause the issue. A scratched tablet screen may affect the touch sensitivity, but it should not affect the pen functionality. The pen software may need updating to improve performance or compatibility, but it should not stop the pen from working altogether. Software updates may disable the pen if they change the settings or drivers, but this can be fixed by re-enabling the pen or reinstalling the drivers2.
References:
1: Troubleshoot your Surface Pen - Microsoft Support
2: Windows 10 touch screen: active pen works, finger does not - Super User