A driving licence is invalid if:

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Correct answer

It has been seized from the driver for a breach of the law by a police officer or by the municipal authority with extended powers.
Its holder is serving a custodial sentence.

What the law says: A licence containing unauthorised entries or alterations is invalid.

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Legal basis: Zákon č. 361/2000 Sb., § 118

The lesson that covers this question — in depth in the textbook, in two minutes in the daily lesson.

Mnemonics, traps and gripes from other learners. Taking a swing at an illogical paragraph is fine — at people it is not.