GMAT Sentence Correction (SC) | Re: Quasars, at billions of light-years from Earth the most

'At billions of light-years from Earth' and 'the most distant observable objects in the universe' are not two different modifiers, but are parts of one single modifier. It would be evident when you convert this appositive modifier to a relative clause modifier:

Quasars, which are the most distant observable objects in the universe at billions of light-years from Earth, are believed to be....