The correct option is B Demonstrating to him the poet's awareness of his joke
There's a shift in narration here- the first four lines are said by a certain 'him' and in the last four lines the narrator is the poet. So, "But still he was glad, I know, when I stood my ground,/ Putting it up to him" - these show that the poet stood up to "him" and was aware of the "fool's errand" 'he' was sending the poet on. In this context, option A is the best answer- "putting it up to him" implies that the poet demonstrated to 'him' that the poet was aware of the joke.