个人觉得底下的一众解释并不是特别有说服力/清晰。

选项3是最容易排除的，指代词使用混乱，digging的主语并不是muslims，放在句首有动词分词的嫌疑，而原文是指digging这个事件本身是动名词。

选项1&2都是倒装句，还原后如下：
选项1. The digging of Chicago’s subway tunnels in the early 1900s, (one of the proudest of family legends), is remembered almost as an epic among America’s 12,000 Bosnian Muslims.
选项2. The digging in the early 1900s of Chicago’s subway tunnels, (one of the proudest of family legends), is almost an epic among America’s 12,000 Bosnian Muslims

选项4 remember sth as sth简单换了个位置
选项4：America’s 12,000 Bosnian Muslims remember [almost as an epic] the digging of Chicago’s subway tunnels in the early 1900s, (one of the proudest of family legends).

选项5：One of the proudest of family legends, (remembered almost as an epic among America’s 12,000 Bosnian Muslims), is the digging of Chicago’s subway tunnels in the early 1900s.

选项1&2结构上何其相似，局部某些成分的顺序调动了并不构成主要语法错误，remembered 是否被省略也不是核心错误。
1，2，4句删除括号里的成分之后，会发现被记住的都是digging，所以底下很多解释说the digging is remembered almost as an epic这样不对。我认为这也不是核心错误，digging, legend, epic本身就是连环指代。epic有壮举的意思啊，可以指digging itself。

官方说的modifier要尽量靠近修饰的词，是指one of the proudest of family legends如果作为digging的同位语，应该尽可能靠近digging。然而the digging of Chicago’s subway tunnels in the early 1900s本身就是一个不太好分割的名词性结构，one of the proudest of family legends插到哪里都不合适，放在末尾又有修饰subway tunnels的嫌疑。换成选项5的表达才能彻底避免这种主词和modifier被过长分割的状况出现。

现在我们来看选项5， (remembered almost as an epic among America’s 12,000 Bosnian Muslims) 作为 family legends的补足语，就紧随其后了。完美！One of the proudest of sth is sth，也是一个无歧义的结构。

一句话概括：这题考察的知识点是modifier要尽量靠近修饰的词。

（果然边写分析才能理清楚所有的语法点。）