(A) In the Stern-Gerlach experiment, a magnetic field gradient is applied to a beam of atoms, which separates into two components with different spin orientations. This is not related to the emission spectrum of an atomic gas. Therefore, this answer is wrong.
(B) In the Stark effect, the energy levels of an atom are shifted due to an electric field. Therefore, this answer is wrong.
(C) The phenomenon is actually due to the electron magnetic moment. Therefore, this answer is wrong.
(D) There is no reason why the number of emission lines would exactly double when a magnetic field is applied. Therefore, this answer is wrong.
(E) The magnetic field can cause degenerate states to become non-degenerate, but it cannot do the opposite. Therefore, this answer is correct.