1. In permanganate titrations, $\text{KMnO}_4$ acts as a strong oxidizing agent in acidic medium, reducing to Mn$^{2+}$.
2. Presence of HCl introduces Cl$^-$ ions, which $\text{KMnO}_4$ oxidizes to Cl$_2$ gas (2Cl$^-$ $\to$ Cl$_2$ + 2e$^-$), consuming some $\text{KMnO}_4$.
3. This side reaction interferes with the titration, reducing accuracy, as $\text{KMnO}_4$ is used up by HCl instead of the analyte.
4. Option (1) is incorrect: HCl is not an oxidizing agent. Option (2) is incorrect: $\text{KMnO}_4$ remains strong. Option (4) is incorrect: $\text{KMnO}_4$ is not a reducing agent.
5. Thus, the answer is (3) $\text{KMnO}_4$ oxidises $\text{HCl}$ into $\text{Cl}_2$.