A reference composition arc brings scene description from another asset into the prim where the reference is authored, then combines that referenced data with local opinions on the destination prim. NVIDIA's Learn OpenUSD references guide states that when a prim is composed through a reference arc, USD first composes the layer stack of the referenced prim, adds the resulting prim spec to the destination prim, and then applies overrides or additional composition arcs from the destination prim.

Option D is correct because /Root/Chair receives the composed contents of chair.usda, while the locally authored xformOp:scale = (1.5, 1.5, 1.5) remains part of the destination prim's stronger local opinions. If the referenced chair asset also authored a corresponding scale opinion on the same property, the local opinion would win by standard USD strength ordering, where stronger opinions override weaker ones non-destructively.

Option A is incorrect because references are not bidirectional synchronization links; editing the referencing layer does not automatically modify chair.usda. Option B is too narrow because references compose all targeted scene description, not only variant sets. Option C is incorrect because a reference does not discard local opinions. This aligns with Composition Reference, Local Opinions, Layer Strength, and Non-Destructive Overrides.