The correct interpretation of the southern states' reaction to the proposed Compromise of 1850 is:
The southern states accepted the compromise because, despite allowing California to become a free state, it strengthened federal fugitive slave laws, indicating that they were most concerned about the status of slavery at the federal level.
This illustrates that southern states were particularly focused on ensuring that their interests in slavery were protected on a national scale, particularly through the enforcement of fugitive slave laws, even if it meant conceding some ground regarding the status of individual states.