Whilst they don't in your example, choosing a password between 1 and 65K is a very bad decision to begin with (assuming the attack knows this ... if they don't the password search space is far larger than the port search space)
In general A does not improve your security 65K times since a single attempt will tell if there is telnet on the port or not, whereas with B all you know if you got the wrong password.
Now if you ran a dummy telnet that always can slow 'wrong password' responses on the other (65K-1) ports that would potentially increase the security 65K times, but still isn't really a meaningful thing to do.
I hope the example was not implying that the “security” was just lack of knowledge of the random telnet port. Running a port scan to find out is incredibly easy (or just use Shodan).
In general A does not improve your security 65K times since a single attempt will tell if there is telnet on the port or not, whereas with B all you know if you got the wrong password.
Now if you ran a dummy telnet that always can slow 'wrong password' responses on the other (65K-1) ports that would potentially increase the security 65K times, but still isn't really a meaningful thing to do.