...where ENCRYPTION takes place:
--> As encrypted PPP payload is encapsulated inside GRE & PPP header, it must be right after L3 (network layer), i. e. PPTP is on SESSION LAYER (also confirmed here: https://networkwalks.com/session-layer-of-osi-model-layer-5/).
See figure 9.9 - PPTP encapsulation:
https://wwwdisc.chimica.unipd.it/luigino.feltre/pubblica/unix/winnt_doc/2000/inbe_vpn_naxe.html
--> However, there is not such answer (Session layer) even though question is asking about OSI model (not TCP/IP), so can it be Transport layer (?).
Or maybe question is just stupid and they expect answer C) "Data link layer", because PPTP can tunnel L2 traffic?
Point-to-Point Tunneling Protocol (PPTP) is a network protocol that enables the secure transfer of data from a remote client to a private enterprise server by creating a virtual private network (VPN) across TCP/IP-based data networks
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