A common riding admonition is to keep a straight line from elbow to bit. Okay. What is straight?
If I look down at my hands while riding, A is the one that appears straight. B feels straight. The answer, at least for saddle seat, is C. (A if driving.) When I combine this wrist position with the elevated hand position, I feel as if I about to poke myself in the chest, if not the eye.
Update: Here I am considering the axis that would consitute cocking the hand up or down while holding the reins. As far as the in/out axis, the back of the wrist should be flat in relation to the forearm (not popped out as pictured in A). Not sure about driving.