Well obviously in A you could also choose 1-1 to all, but I get your point.
My general understanding of how damage to multiple targets works (including official rulings on how it interacts with Wrest the Mind) says that it is scenario B. However, there is a really old ruling on BGG here: http://www.boardgamegeek.com/thread/700600/the-visionary which says it is scenario A.
I suppose he doesn't actually say you can choose different targets for each damage, but I read it as saying that each damage is resolved as a totally separate event.
I think it's possible to reconcile the two rulings -- Twist the Ether changes the description of the attacks en mass, thus changing the initialization, if you will, of each attack, but then each attack is resolved individually.