The process being illustrated in the diagram of homologous chromosomes during prophase I of meiosis is b) Crossing over in which alleles are exchanged.
During prophase I, homologous chromosomes pair up and can exchange genetic material through a process called crossing over or recombination. This leads to genetic variation in the resulting gametes. The other options pertain to different processes or stages related to genetic material but do not accurately describe the specific events of prophase I in meiosis.