The correct description of the energy transformation as the model roller coaster rolls from point X to point Y is: Potential energy transfers to kinetic energy, then some kinetic energy transfers to potential energy.
This describes the process correctly as the roller coaster starts at a height (point X) with high potential energy, which converts to kinetic energy as it moves downwards. As it rises again to point Y or any subsequent height, some of that kinetic energy is converted back into potential energy.