The unexpected ending comes when we discover the true identity of Jimmy, that connects later Bob to the unnamed cop.
Bob was in the meeting place waiting for his friend Jimmy in the time they committed to meeting after twenty years. The first person he talks to, while he waits, is a passing-by police officer; They engage in talking about the meeting and Bob tells him how has been his life in the last twenty years, and what type of person his friend Jimmy was. He were certain that his friend sure would come, even after all these years.
The officer walks away, and right in the scheduled meeting time his old friend Jimmy shows up. Soon after that Bob realizes that his friend has become different from the past, after all, even his nose has changed! That is the final moment, when he discovers that the one who came at the meeting was a false Jimmy and this "Jimmy" arrests him; The true Jimmy, Bob later finds out through a letter, was the first cop who talked to him and didn't want to arrest his friend, so he sent another policeman there to finish the task.
Then, the right answer is A.) He withholds the fact that Jimmy knows the identify of the other man from the start. As Jimmy was the cop.
