Step 1: Eigenvalues of \( P \).
The matrix \( P \) is a \( 5 \times 5 \) matrix that has eigenvalues \( \pm 1 \) and \( 0 \), with multiplicities that need to be computed. By inspecting \( P \), we find that it has 3 distinct eigenvalues: \( 1, -1, 0 \). Thus, option (C) is true.
Step 2: Analyze option (A).
The nullity of \( P - I \) is the number of linearly independent solutions to \( (P - I) \mathbf{v} = 0 \). Since \( P \) has eigenvalue \( 1 \), this is not necessarily true for all cases. Thus, option (A) is false.
Step 3: Analyze option (B).
The matrix \( P \) has only 3 distinct eigenvalues: \( 1, -1, 0 \), so option (B) is false.
Step 4: Analyze option (D).
Since \( 1 \) and \( -1 \) are eigenvalues of \( P \), they satisfy \( \lambda^2 = 1 \). Hence, option (D) is true.
Step 5: Conclusion.
The correct answer is (C), as \( P \) has 3 distinct eigenvalues in \( \mathbb{R} \).