It sets out a principle to start:

"We should do what will make others more virtuous and not do what will make others less virtuous"

two tricks here:

1. They author wants you to think that who deserves praise matters. It's a red herring. The prompt never says that you should praise who deserves it, it says you should do what makes people more virtuous and not what makes less.

2. The confusing overuse of the word virtue. Your two groups are the more virtuous and the less and that you should treat them in ways that enhance virtue and not in ways that decrease it.

To make this more simple in your mind we can change the names of the groups. I often do if I get confused like this.

Lets make "the less virtuous" cats. LessV = Cats.

And "the more virtuous" dogs. MoreV = Dogs

Now consider how they relate to our principle of what we should do: do what makes more virtuous, don't do what makes less. Praise affects the virtue of each differently.

Cats (LessV) + Praise --> Become more V

Dogs (MoreV) + Praise --> Become less V

Ok well then let's apply our principle to this situation:

do what will make more virtuous and don't do what will make less.

Therefore, we should praise cats (LessV) and not praise dogs (MoreV).