Btw, here's an expertly drawn diagram that took 1000 hours in MS Paint to show things visually.

None of your three pictures really illustrates the actual physical scenario very well. (OK, picture B kind of comes close.) Here's a slightly nicer and, more importantly, more physically correct drawing I quickly whipped up in Inkscape:

The important thing to realize is that Newtonian gravity is an inverse-square force, i.e. the strength of the gravitational attraction between two bodies is proportional to the inverse of the square of the distance between them.
This abstract-sounding property has a remarkable consequence: the paths of two objects under their mutual gravity (viewed from a reference frame at rest relative to their mutual center of mass, and assuming that other forces and the gravitational effects of other objects are negligible) are always conic sections: circles, ellipses, parabolas, hyperbolas or (as a degenerate case) straight lines.
Also, the paths of the two bodies always share a common focus. And since the focus of a conic path does not lie on the path (except in the degenerate case of a straight line path), this results in an even more remarkable consequence: two objects interacting under gravity, in the absence of external forces, can only collide if they start out moving straight towards each other (or so close to straight that they pass within the sum of their radii from each other).
(To address some of the comments below, I should clarify here that by "straight towards each other" I mean straight in a reference frame where the objects' mutual center of mass is at rest. If you look at things from a transversely moving reference frame, straight paths can look curved and closed circular or elliptical orbits can look like corkscrew spirals, etc., but that that doesn't change the underlying physics. Also, in particular, if you're sitting on one of the objects and don't see the other one falling straight towards you, then it's not going to collide — at least not unless there's a third object nearby to perturb the system.)
In other words, your illustration of "scenario A" isn't physically possible. Unless the objects hit each other head on the first time they pass each other, they won't hit at all. They cannot spiral around each other before colliding, at least not unless some force other than gravity perturbs their orbits, or unless they're are close enough to each other and massive enough that the non-Newtonian effects of general relativity become significant (as happens e.g. in neutron star mergers).
And it's very rare for two objects in space to move exactly towards each other, so your scenario A is actually the rare case. It does occasionally happen, of course (otherwise there would be no meteor impacts, no protoplanetary collisions like suspected lunar formation event and no stellar collisions), but only very rarely.
Instead, the common cases are your scenarios B and C.
You've drawn scenario B pretty accurately: if the objects are moving too fast relative to each other, their mutual gravitational attraction won't be strong enough to pull them back towards each other after they've passed. In this case their trajectories relative to each other will be hyperbolic (or, if their relative speed is just enough, parabolic), and they'll never meet again after flying past each other once.
(That is, unless of course the gravity of some other body causes their paths to curve and brings them close together again later. This happens e.g. with the Earth and near-Earth asteroids, which are asteroids whose orbit around the Sun brings them repeatedly close to the Earth.)
If the objects aren't moving fast enough, however, we end up in scenario C: mutual orbit. Your drawing of this scenario has one major inaccuracy, though: in order for two objects to stay in a mutual orbit (without the influence of a third body or non-gravitational effects) they must already be in a mutual orbit!
In particular, (Newtonian) gravity is a conservative force, and thus dynamics under it are time-reversible. Since it's not possible for two objects orbiting each other to spontaneously gain enough speed to fly apart, it's also not possible for two objects not already in a mutual orbit to spontaneously lose enough speed to end up orbiting each other.
(However, it's possible for quite distant objects to be in a mutual orbit, as long as their initial relative speed when far apart is sufficiently low. They'll gain speed as they fall closer to each other under gravity, but they'll also lose the same amount of speed when flying away from each other, until they finally end up at the same relative distance and velocity as they started. A familiar example of this are the orbits of long-period comets around the Sun.)
Remarkably, all of the above depends crucially on gravity being (at least approximately, ignoring relativistic corrections) an inverse-square force. If the strength of the gravitational attraction between two bodies was instead inversely proportional to, say, the cube of their distance, then much stranger orbits similar to your spirals would in fact be possible, and objects in space would be much more likely to either fly apart or spiral into each other.
Ps. If Newtonian gravity says that two non-orbiting bodies can't just spontaneously get captured into a mutual orbit, then how do objects end up orbiting each other in the first place? Well, there are two or three common situations:
A lot of celestial bodies are formed already orbiting each other. This is true e.g. of most binary stars (which condense out of the protostellar nebula together), planets (which form out of the protoplanetary disk of gas and dust surrounding a young star) and most major moons (which form either in a similar fashion as the planets themselves, or from collisions between protoplanets).
In a way this shouldn't be too surprising: two nearby objects in space will not orbit each other only if their relative velocity is high enough for them to escape each other's gravity (or low enough that they fall together and collide). And most of the time nearby things in space tend to have fairly similar (but not exactly the same) velocities.
Another way for two objects to end up orbiting each other is through gravitational integrations with a third body. With three interacting objects, much more complex orbital dynamics are possible. In particular it's possible for one of the three bodies to be flung away, taking enough kinetic energy with it that the other two bodies can no longer escape each other but will remain in mutual orbit.
This is believed to be e.g. how the irregular moons of the large gas planets in our solar system got captured into their current orbits: either they interacted (gravitationally or collisionally) with a pre-existing moon of the planet, or they started out as binary asteroids (which likely formed in situ, as described above) that ended up breaking apart when they passed too close to the planet, with one half of the pair flying away and the other getting stuck in orbit around the planet. Three-body (or more likely many-body) interactions likely also explain how the Earth's moon managed to end up in a stable non-Earth-intersecting orbit after its initial formation in a collision between the proto-Earth and another protoplanet.
Finally, it's possible for objects in space to interact via non-gravitational forces (such as fluid drag, which is e.g. how the gas around newly forming stars coalesces into the protoplanetary disk mentioned above) or through gravitational interactions not captured in the simple Newtonian point mass model of gravity (such as tidal forces acting on extended bodies, or gravitational wave emission in general relativity).
While such interactions tend to be fairly weak compared to gravity for things like asteroids, moons, planets and stars, they can still affect their orbits over sufficiently long time periods. In particular, once two bodies initially end up in a mutual orbit through one of the mechanisms described above, things like tidal interactions can help gradually dissipate energy and make the orbits more stable and closer to circular.
What if there have been millions or billions of years for those objects to crash or fly apart, leaving however remaining objects orbiting each other?
– Robbie Goodwin Nov 25 '23 at 22:42