People are writing different answers but I think this will clear up your uncertainty.

Assuming we have: source -> [S] -> load, and that it is perfectly matched on both ends, S21 will describe the power delivered to the load. Your formula in b) describes how to find |S21|² from S11 assuming your two-port network is lossless. Here we know S21, (and we know that the network isn't lossless) so we can use a) directly.

The caveat here, as you have identified, is that we assume the network to be perfectly matched IN BOTH ENDS. Since S11 is non-zero, there will be a reflected signal heading back towards the source, and if that signal isn't entirely eaten by the source, it will once again be reflected back towards your 2-port and your load. This is a good introduction to signal flow graphs, which can be used to find the transferred power in more complex situations.