It is case B. The egg syntax defines all transforms, including joint transforms, relative to the parent node only. When the animation is played, Panda accumulates the transforms for each joint.
Note that although joints are defined using a local transform, vertices are defined in an egg file using global coordinates, which is irrespective of transforms appearing within the egg file. (This means when the egg file is loaded, the vertex coordinates given in the egg file must be pre-transformed by the appropriate inverse matrix to compensate, but that’s Panda’s problem.) More information about this can be found in the egg syntax document.