he saw it ---when he was walking past A happening B happen

答案：A
解释：
1、see sb. do sth. 表示“看见某人做了某事”,用动词原形表示动作已经完成,强调是动作的全过程.比如：
I saw him get on the bus.
我看见他上了车了.
I saw him work in the garden yesterday.
昨天我看见他在花园里干活了.
2、see sb. doing sth. 表示“看见某人正在做某事”,用动词ing形式强调动作正在进行,比如：
I saw them playing basketball at 5 p.m. yesterday.
昨天下午五点,我看见他们在打篮球.
3、He saw it ___when he was walking past. 此句中“when he was walking past”意为“当他路过的时候”,也就是说当他路过的这个时刻,【发生】这一动作正在进行,所以用ing形式更为恰当.
4、综上所述,正确答案是A.