It's option C. The ring actually triggers (200 / 5) = 40 times on the way down.
The Ring is activated "...immediately if the wearer falls more than 5 feet." Feather Fall does not change whether a character is falling, but rather the "rate at which the targets fall." So, after the first 5', it triggers. After the second 5', it triggers. And so on, until the character touches down.
Unless you can throw a tree, you cannot throw a feather token and make it turn into a tree on your target. Because activating a feather token is a Standard Action. Just getting this out of the way as people try this more often than not.
Now, if you are inside a creature, and manage to activate a magic item, it will work normally.
If you are Swallowed you are also grappled, which states that you can take any action that doesn't require both hands. As long as you don't need both hands to activate a magic item, you will be fine, you are not restricted from your other actions.
If you look at this topic, Sean K. Reynolds said:
If you are swallowed, you are restricted in your actions (as per the grapple condition). You also have the option of cutting yourself free (which you don't have for a normal, non-swallow, grapple situation).
The bit about "just try to escape from the grapple" is a reiteration of the normal option for being grappled; it's not limiting your options to just cut-or-escape.
So, he can activate any magic item, shuffle through his bags and pockets, draw or shealthe weapons, drink potions, cast spells with a concentration check, try to escape the swallowed condition by succeeding a grapple check and go back to the creature's mouth, etc.
However, if you look at the magic item stat block, you will see that the feather token uses a conjuraiton (creation) spell, Major Creation, which say in the CRB:
A creature or object brought into being or transported to your location by a conjuration spell cannot appear inside another creature or object, nor can it appear floating in an empty space. It must arrive in an open location on a surface capable of supporting it.
That said, in the case of the Tree Feather Token, it cannot be activated inside another creature.
In my table, i would allow the item to be used, because of the Rule of Fun of describing the scene to my players.
Best Answer
First of all, this item has a single-use effect:
Secondly, as you specified the creature cannot attack. Part of a creature's CR comes from the amount of damage it can deal per round, but in this case no damage can be dealt. That said, it does not seem overpowered to me.
As for the second point:
These are the only conditions that cause the creature to disappear. Without these conditions, the creature remains.