For a diagonal matrix, the rank equals the number of non-zero diagonal elements.
If the rank is $2$, exactly two of $a, b, c$ must be non-zero and one must be zero.
Thus, the possible condition is
$ab \neq 0,\; c = 0$.
In general $AB=0\nRightarrow A=0$ or $B=0$.
Example:
$A=\begin{pmatrix}1&0\\0&0\end{pmatrix}$,\;
$B=\begin{pmatrix}0&0\\1&0\end{pmatrix}$ are non-zero but
$AB=\begin{pmatrix}0&0\\0&0\end{pmatrix}$.
So $\boxed{\text{(A)}}$