I think B is just a symptom of the complete failure of (many) business people to understand what ML is or what it is good at. It starts with people equating "AI" with something they've seen in a movie and working backwards, and like you say, ends with just a really bad way of interacting with a menu system. This is going to persist until either we invent AGI or AI stops being a buzzword used by business people who have no idea what the technology actually does to make up use cases.

Both B) and C) is because these small businesses, most of them have no website. The barrier to entry for businesses to go online from a resource perspective (time, training, cost etc.) is much, much lower to just have a Whatsapp business account.

Whatsapp is just an amazing bang-for-your-buck proposition, but we are limited to the constraint of that ecosystem.

If a small business can pay someone else to develop and host a turnkey WhatsApp bot, they can pay someone else to develop and host a turnkey website, no?

It's not meant to be specific to the business. People usually contact small businesses for scheduling / rescheduling / cancellations , those kinds of inquiries are "bot-able" to certain extend. The plan is to have an affordable subsription service for general use.

As I mention before, the decision tree is still designed by the business, the AI is for the natural language processing.

I'm not following. Why can't that service be a web site? That doesn't imply it has to be specific to the business. Think PayPal or Square.

But...what if they don't know how? Hiring for things you don't know how to do, or why you would, is very difficult.

Why does that make paying for a natural language bot better? Small business owners don't know how to implement natural language AIs any more than they know how to make a web site.

People hire others to do things they don't understand all the time. That's the point of hiring people. You ask your peers for a recommendation and judge based on the result.