The option that correctly revises the sentence is:
The squirrel, who ran in circles around the circumference of the tree, chattered angrily at the curious cat.
This is the sentence that has the appropiate punctuation, since who ran in circles around the circumference of the tree is a non-restrictive relative clause and needs to be separated from the rest of the sentence by commas. You can identify non-restrictive relative clauses because they are introduced by words like who, what, that, whom or whose, and can be left out of the sentence without affecting its meaning.
