I’m saying B. The reason A isn’t all that bad is because, presumably if you’re doing it in public and getting rejected, is that you put her on the spot. Really? You’re expecting someone to make one of the most important decisions of their lives in a very public way. And she’s not rejecting lightly, after all, the social pressure for her to say yes is enormous, and generally, even if she has good reason to say no, chances are that the unwitting spectators are going to think poorly of her for doing so. After all, this guy went out and expressed his love for her publicly and she rejected him? Ugh… it’s emotional blackmail. Hell, she might actually want to marry him, but was just overwhelmed by being in that situation and didn’t know how to react.
That’s not to say I think it should necessarily be a private thing. Depending on your relationship and that with your friends and families maybe have them involved in some capacity if it’s appropriate, but do it in a way that leaves her in a safe place.
And that’s why the second one is worse. She accepted it, you get applause, congratulations, whatever. Then you either find out that she just wanted to save your face publicly, which means she didn’t think you’d take rejection well, so she doesn’t think much of that aspect of you, which is as bad as being rejected publicly other than a few brief moments of public humiliation. Or, worse, she was wrapped up in the emotion and really wanted to say yes, but then thought about it and, through reason, realized that it was a poor decision. That would hurt WAY more because I can accept, to a certain extent, decisions made in the heat of the moment, provided they aren’t hurtful or malicious, but decisions made in reason are more indicative of the relationship being doomed.
So, in short, if you are going to make a public proposal, like any time one is going to do something publicly, you’ve made a choice that the probability of the reward–presumably public gratification–is outweighed by the probability of the negative–public shame. If you don’t like those chances, don’t do it; she has no choice.