Bt cotton is created using the bacterium Bacillus thuringiensis. This bacterium produces protein cry that contains a toxic insecticidal protein. The gene that produces this toxic protein, is incorporated in cotton and Bt cotton is produced. Hence, assertion is incorrect.
Bt toxin doesn't kill the bacterium Bacillus thuringiensis because it is formed in an inactive form. When the insect ingests the inactive toxin, it gets exposed to the alkaline pH of the gut which solubilize the crystal and it is converted into the active form. The activated toxin binds to the midgut of epithelial cells and creates pores and causes swelling and lysis and eventually causes the death of the insect. Hence, the reason is correct.
So, the correct answer is D.