Step 1: Write out the quadratic form in full.
For $A=\begin{pmatrix}3&1&1\\1&0&2\\1&2&0\end{pmatrix}$, the form is $x^TAx=3x_1^2+2x_1x_2+2x_1x_3+4x_2x_3$.
Step 2: Complete the square instead of using eigenvalues.
Group the $x_1$ terms first: $3x_1^2+2x_1(x_2+x_3)=3\left(x_1+\dfrac{x_2+x_3}{3}\right)^2-\dfrac{(x_2+x_3)^2}{3}$. Substituting this back and then completing the square in $x_2$ gives, after simplification, three squared terms with coefficients $3$, $-\dfrac13$, and $8$.
Step 3: Read off the signs.
Two coefficients are positive and one is negative, matching the eigenvalue signs, so A is invertible and indefinite. The level set $x^TAx=1$ is a genuine hyperboloid, not a cone or an empty set.
Step 4: Rule out A and C, confirm D.
Since the form reaches 1 along a positive-coefficient direction, S is not empty, so (A) fails. Since one term is negative, we can let the matching coordinate grow freely while the equation still balances, so S extends to infinity and is unbounded. So (C) fails and (D) holds.
Step 5: Check line intersections directly.
On any line $x=x_0+tv$, the condition $x^TAx=1$ turns into $(v^TAv)t^2+2(x_0^TAv)t+(x_0^TAx_0-1)=0$, a quadratic in $t$. A quadratic equation never has more than two roots, so any line meets S in at most two points, giving (B).
Final Answer:
S is an unbounded quadric surface, and every line meets it in at most two points.
\[ \boxed{\text{(B) and (D)}} \]