I am a bit unsure with my reasoning for this question because I could not find direct support. It seems like the evidence window is limited to just lines 51 to 55 where African American folklore culture was brought up.
It seems like, at best, the lines 51-55 support answer "E" because it is saying that Their Eyes were Watching God was previously under-appreciated because of the lack of African American folklore criticism lens to help readers better appreciate and understand the work. This matches "e" in that the "some readers did not fully appreciate" is about readers who previously did not appreciate Their Eyes. This was also weak for saying "some".
Other answer choices with the reasoning I used to eliMinate them
A) First Recognized was a red flag
B) Seemed out of scope by saying this was never used until the 1940s; the passage does not talk much about African American literature before 1940s
C) First used was a red flag
D) Very extreme, there could have been an outlier work in the 1940s that incorporated this or if folklore culture was considered mainstream (do we actually know if it was mainstream or rare?) then this choice is not tenable either.