The correct answer is the last option: It describes how brutal imprisonment is to someone who has enjoyed total freedom.
Hyperbole refers to literary technique where an author uses overstatement or exaggeration to make his/her point come across are more compelling or impactful. In the sentence, "Seventeen months' captivity to a sailor accustomed to the boundless ocean, is a worse punishment than human crime ever merited.", it is mentioned that the sailor who is held captive or imprisoned is someone who enjoys complete freedom ("...accustomed to the boundless ocean"). Due to this, hyperbole in the sentence describes how brutal imprisonment is to someone who has enjoyed total freedom.
