Step 1: Leghemoglobin is an oxygen-binding hemoprotein found in the root nodules of leguminous plants.
Step 2: The enzyme nitrogenase, which fixes atmospheric nitrogen into ammonia, is highly oxygen-sensitive and gets inactivated in the presence of oxygen.
Step 3: Leghemoglobin binds oxygen, maintaining a low free oxygen concentration in nodules, while still supplying enough oxygen for bacterial respiration.
Step 4: This protects nitrogenase from inactivation. Therefore, the correct answer is (A).