You want this SQL function to be inlined, but it isn't being. I think the reason is that (by default) it's VOLATILE, and inline_set_returning_function doesn't like that:
* Forget it if the function is not SQL-language or has other showstopper * properties. In particular it mustn't be declared STRICT, since we * couldn't enforce that. It also mustn't be VOLATILE, because that is * supposed to cause it to be executed with its own snapshot, rather than * sharing the snapshot of the calling query. We also disallow returning * SETOF VOID, because inlining would result in exposing the actual result * of the function's last SELECT, which should not happen in that case.
So try adding STABLE to the function definition.
Indeed, when I add STABLE to function, then planner uses index (same plan as (B) in original post).
