A noun clause is a dependent clause that functions as a noun. It usually begins with what, whatever, whom, that. A noun clause can act as a subject, object, predicate nominative or object of a preposition, in a sentence.
The noun clause "why Pennywise..." functions as the object of the verb "figure out" in the given sentence. 'Why' is a question word often used in noun clauses. The clause in C is a noun clause because it begins with a question word 'why', a subject 'Pennywise' and a verb loved'. Hence option C is correct.
Option A is incorrect because it isn't a noun clause as it contains the main verb; nor is it the subject here. The main subject of the entire sentence is "The police"; it performs the action "couldn't figure out" ('could not/couldn't' is a modal/helping verb that determines the mood of the sentence).
Similarly, option B is incorrect because it isn't a noun clause, an object does not contain the main verb "figure out".
The subject performs the action of the verb and the object receives that action, they do not include the verb. The subject, verb, and object are separate parts of a sentence.
Option D is incorrect because "The police" is a subject, but not a noun clause.