Step 1: Concept
If the distance of every point on line $L$ from a fixed line $M$ is constant, line $L$ must be parallel to line $M$.
Step 2: Analysis
The direction ratios of the given line are $(3, -2, 1)$.
Line $L$ passes through $(1, 2, 3)$ and has direction ratios $(3, -2, 1)$.
Equation of $L$: $\frac{x-1}{3} = \frac{y-2}{-2} = \frac{z-3}{1}$.
Step 3: Verification
Check if $(-5, 6, 2)$ lies on $L$:
$\frac{-5-1}{3} = -2$; $\frac{6-2}{-2} = -2$; $\frac{2-3}{1} = -1$.
Since $-2 \neq -1$, the point $(-5, 6, 2)$ does not lie on the line.
Final Answer: (D)