The correct option is A severely punished by her teacher.
While reducing a sentence to an adverb/adverb phrase, the subject and verb in the second sentence are removed and the remaining is connected to the other sentence. The result is a simple sentence.
From the given options, C is correct as the second sentence is reduced to an adverb phrase, "severely by", thereby forming a simple sentence and retaining its meaning.
Option A does not use the adverb form of "severe", it uses the adjective. Hence, A is incorrect.
Option B is incorrect as it includes an unnecessary addition of words, changing the verb "punished" to a noun "punishment" and adding a new verb "given".
Option D is incorrect because the answer lies in C.