ANS:D - all of the above.

If a pile surrounded by soil settles more than pile settlement a downward force acts on pile, due to this downward force the additional load is acting on pile, so pile capacity is reduced. All of the above, because in soft soils the pile is driven due to its self-weight only. So, in this case the direction of friction is in downwards, the settlement will be more and bearing capacity will also decrease.