Current config turns LED off if C is triggered (pulse to delay-RST), but does nothing to prevent LED from coming on again (as you have seen).
For C to keep LED off, you will need to use it to prevent A/B from sending a pulse to delay-SET. You already have a ‘gate’ node to block these pulses, so you just need to add C as a control for that gate. The easiest solution is to put an ‘and’ node between ‘defer’ and gate. You want to be able to trigger LED when C is off, so you need to send C to a ‘not’ node, then to the ‘and’ above gate:
FYI: The if-else node near the top of you code has no COND or F. Unless you are just dropping other code to make what you post simpler, this if-else node should not be here. Since COND is defaulting to False, and you are getting LED turned on, I assume you have just not included all your code…