I can guess what the issue is. This is one of the poorly constructed question. The question should have clearly stated if the base test is an one-sided one or a two-sided one. Given H1 is p = 0.04 which is less than p = 0.1 (H0), it is likely this is an one-sided test where you reject H0 for low values of the observed test statistic. Using this argument, does the solution now make sense?
