In English grammar, the plural form of compound nouns that include "brother-in-law" is created by pluralizing the most significant word in the compound. In this case, "brother" is the main word, and hence it should be pluralized.
The correct and more grammatically sound option is actually "He has two brothers in law" (Option 3 or Option 4). The previously marked answer, "He has two brother in law," does not follow the proper rules for pluralizing compound nouns. It seems there was an error in the provided correct answer.