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Without the upper-arm rotation, the photon polarization still labels the path. Before BS2 the quantum state isAfter the balanced beam splitter, the polarization-valued output amplitudes areThe detectors do not resolve photon polarization. Since $⟨H|V⟩=0$, the cross terms vanish in the Born rule:These probabilities are independent of the tunable quantum phase and the input photon polarization, so there is no usable wave interference fringe. Equivalently, taking the partial trace over photon polarization removes the quantum coherence between the two path quantum states. The which-path information is retained in orthogonal photon polarizations even without anybody measuring it. Rotating the two occupied photon polarization quantum states to the same quantum state removes that distinction and allows the cross term in part (ii).