The option that best describes the underlined part of this sentence is D: "nonrestrictive clause".
A non restrictive clause modifies or describes a noun in the sentence, but in a nonessential way to the meaning of the it. In this particular case, the canyon being formed by erosion doesn´t change the sense that it was a breathtaking sight to behold.
On the other hand, restrictive clauses limit or identify the nouns it describes and cannot be removed from a sentence without changing the sentence’s meaning.