The text feature contains high-cardinality categorical values with minor spelling variations, which is a common real-world data quality issue. Traditional encoding techniques such as ordinal encoding (Option A) or one-hot encoding (Option C) would treat each misspelled value as a completely separate category, resulting in poor generalization and very high dimensionality.

Similarity encoding addresses this problem by grouping or encoding categories based on string similarity. Categories that differ only slightly—such as spelling errors—are encoded with similar numerical representations. Amazon SageMaker Data Wrangler supports similarity encoding specifically for such noisy categorical features.

Target encoding (Option D) depends on the target label distribution and risks target leakage if not carefully applied.

Therefore, similarity encoding is the most appropriate and AWS-recommended solution.