What does my Schengen visa mean?

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The option a that you provided is closer to the correct calculation. Consider the 90 days out of 180 rule as a sliding window period, which means for every consecutive 180 days, you can spend only 90 of them in the Schengen area. In this case if you spend 21 days of August in the Schengen area, assuming your visa expires on the 31st of December, since at any window until the end of the year those 21 days of August will be present, it would imply that you can spend only 69 more days in the Schengen zone throughout that year no matter when you enter and leave.

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