1. Refer Definition : Clear Astern and Clear Ahead; Overlap  One boat is clear astern of another

when her hull and equipment in normal position are behind a line abeam

from the aftermost point of the other boat’s hull and equipment in normal

position. The other boat is clear ahead. They overlap when neither is clear

are sailing more than ninety degrees from the true wind.

Therefore all three boats were overlapped at the Zone as they were sailing more than ninety degrees from the true wind.

2. Rule 18.1 (a)  applies

(a) Rule 18 applies between boats when they are required to leave a mark on the same side and at least one of them is in the zone (Boats were overlapped when A reached the zone at position 1 and entitled to mark room.)

3. 18.2 (a) (1) applies and  Giving Mark-Room (a) When the first of two boats reaches the zone,

(1) if the boats are overlapped, the outside boat at that moment shall give the inside boat mark-room;
In our case B is to give mark room to A; and C is required to give mark room to both A and B.

4. B breaks rule 10 against C; but she will be exonerated under rule 43.1(b) as she is sailing within the mark room entitled to her from C and comply with her obligations to A.

C DSQ under rule 18.2(a)(1) 

I'm with Phillip, in the definition its a measure, and that measure should be consistent. A less than competent crew is not entitled to more room than an expert one, and would be breaking a rule if they require it (lets leave room made freely available out of it for now).  Similarlty an expert crew is allowed the same room as a competent one, even though they may not need it,

John, I agree with you about reasonable apprehension and skill level, but I think its a red herring in the context of Room and Case 103.

A holywood is really a match racing term for a great show, but may not be genuine.

@Lars - having done a number of WASZP events, I found the RRS 42 rules easy to see and enforce.

The world sailing judges manual changes on improper act or ommission in each version, each seeming giving judges more room for interpretation. Just track the change next time, it may be what gordon and i may expect.
The old bad race management hidden behind the word may not shall,, may not be tolerated.
A time of change perhaps! I believe for the better if we are to improve standards and improve the sport.