Step 1: Understanding the Concept:
This question deals with insertional inactivation. When a foreign DNA fragment is inserted into the coding sequence of a selectable marker gene (like an antibiotic resistance gene), that gene is disrupted and becomes non-functional.
Step 2: Detailed Explanation:
$\bullet$ The pBR322 plasmid contains two resistance genes: $amp^{R}$ (ampicillin) and $tet^{R}$ (tetracycline).
$\bullet$ In this experiment, foreign DNA is inserted into the $tet^{R}$ gene.
$\bullet$ As a result, the $tet^{R}$ gene is inactivated. The transformed cell loses its resistance to tetracycline.
$\bullet$ However, the $amp^{R}$ gene remains intact because no DNA was inserted there. Therefore, the cell remains resistant to ampicillin.
$\bullet$ Non-recombinant plasmids (those that didn't take the insert) would retain both resistances.
Step 3: Final Answer:
Recombinant cells will be ampicillin-resistant ($Amp^{R}$) but tetracycline-sensitive ($Tet^{S}$).
This corresponds to option (A).