A and C. The whole event system is designed around the idea of "filtering" by picking, or narrowing down what you want to interact with. IMO it's always better to have more control over the exact behavior you want, the way it is now. It is simple enough (and you have several options) to add conditions to specify the specific object you want within a stack of picked objects such as when touch overlapping objects.
Look at it from a different perspective. If the touch behavior was changed as you specified, what do you do when you DO want touch to interact with overlapping options? If the objects below the top instance are already filtered out, how would you interact with them by touch?