SteelBlooded Erunsil with two fighting knives penalties

[Coimiral Ap Nar]

So let's say we got :

An Erunsil 12th lvl fighter with the following:

1)Steelblooded Heroic Path : Skilled Warrior->reduce TWF penalties by half

2)Two erunsil fighting knives : erunsil elves suffer half the penalties for two weapon fighting with 2 erunsil knives

3) Two-weapon Fighting, Improved Two Weapon fighting , Greater Two Weapon Fighting

4) BAB +12/+7/+2


So, what are the penalties for attacking with 2 knives?

A) +11/+6/+1 with the primary and +11/+6/+1 with the off-hand?

B) +11/+6/+1 with the primary and +11/+9/+8 with the off-hand?

C) +12/+7/+2 with the primary and +12/+7/+2 with the off-hand? (the penalties are half down?)