Choose HOBBY.
I'm seeing this type of question for tax year 2024, and I attribute it to the fact that Form 1099-NEC was resurrected a few years ago to stipulate Self-Employment income as well as the fact that scholarships can be considered as Earned Income for an IRA contribution.
Scholarships, as well as prizes, should be reported on Form 1099-MISC.
Regardless, if you select HOBBY, the income will be reported on Schedule 1 (same as a scholarship but a different line) and treated the same as a scholarship, as far as eligible for IRA as Earned income and not subject to Self-Employment Tax (FICA)
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