The correct answer here is option 1, which states that both Assertion (A) and Reason (R) are true and R correctly explains A. Assertion (A) is accurate, as Lord Linlithgo did describe the August Movement of 1942 as the most serious revolt after the Sepoy mutiny. Reason (R) also aligns with historical fact, as peasants did participate in the movement en masse in certain regions.

The reason (R) explains the assertion (A) correctly, demonstrating how the large-scale participation of peasants - typically not heavily involved in such movements - would amplify the scale and seriousness of the revolt, making it a significant uprising after the Sepoy mutiny. Hence, the large-scale involvement of peasants is a relevant point to explain why Lord Linlithgo considered the August Movement as a substantial revolt.

Thus, the explanation correctly gives context to each option and supports why Option 1 is indeed the correct answer.