I thought that deploying flaps will increase both the drag and lift,
thus increasing L/D ratio
The lift coefficient increases, but the lift force does not, at least over the long run. The lift force in steady-state horizontal flight must equal weight. In a moderate climb or glide lift still must be almost equal to weight-- the actual formula is lift = weight * cosine (climb or glide angle).
But do they increase proportionately?
No they do not. For the vast majority of (or perhaps all) airfoils used in actual aircraft, deploying the flaps (even slightly) decreases the maximum value of the ratio of ((lift coefficient) / (drag coefficient)), which is also the ratio of ((Lift force) / (Drag force)), which (in the case of an unpowered glider with zero thrust) is also the glide ratio.
And how exactly does that correlate with the increase/decrease of the
minimum drag speed (VimD)?
The speed for minimum Drag force (which is not the speed for minimum drag coefficient, but which is also the speed where the least Thrust is required to maintain constant altitude, or to maintain any given glide or climb angle) occurs at the speed for the maximum ratio of ((Lift force) / (Drag force)), which is also the speed for the maximum ratio of ((lift coefficient) / (drag coefficient)). Deploying flaps is somewhat like decreasing the weight of the aircraft-- due to the increased lift coefficient, the entire curve of L/D (or Cl/Cd) versus airspeed gets shifted to the left (toward lower airspeeds), as well as distorted in other ways (to reflect the decrease in max L/D or Cl/Cd), and thus the speed for the max L/D (or Cl/Cd) ratio, which is also the speed for minimum Drag force, occurs at a lower airspeed with flaps down than with flaps up.
The answer to your question is therefore option "4".
If you intended to ask about the minimum drag coefficient-- that would always correspond to high-speed flight, at a low angle-of-attack, with the flaps up. Lowering the flaps would increase the drag coefficient at any given airspeed or airspeed or angle-of-attack, at least if we are talking about flight well above the max L/D speed.
Related ASE answers--
Is the maximum lift-drag ratio found at minimum drag? (see several answers) -- establishes that minimum Drag force occurs at the angle of attack (and logically also the flap setting) for max L/D
Can we show through simple geometry rather than formulae or graphs that the best glide ratio occurs at the maximum ratio of Lift to Drag? -- same conclusion, but geared toward gliding flight -- "Also note that the geometry of the triangle is such that the maximum Lift to Drag ratio also coincides with the minimum Drag value..."
What determines the best glide speed? -- similar