Why is わるいそうです similar to わるいといっています?

Question

I am practicing for N4, the question prompt is this:

I am confused why 3 is the correct answer for the following question:

My understanding is as follows:

1. Yamada-san's convenience is "evil" it seems. (??)
2. I think it's inconvenient for Yamada-san.
3. Yamada-san said it's inconvenient.
4. It's probably inconvenient for Yamada-san.

Answer 1

そう has two different meanings:

• What is the difference between [plain form of verb]～そう and [root of verb]～そう?
• Why does そう in 「美味しいそう」 not mean "seem" the way I think it should?
• N + sou desu is acceptable

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そう after a 終止形 ("sentence-ending" form) is a hearsay marker, and is translated as "I've heard ...", "(He/She) said ..." or "People say ...". Here, 終止形 includes:

1. dictionary form of a verb

   来るそうです。 I heard he will come.

2. dictionary form of an i-adjective

   おいしいそうです。 I heard it's delicious.

3. だ (after a noun or a na-adjective)

   学生だそうです。 I heard she's a student.
   簡単だそうです。 I heard it's easy.

4. some auxiliaries that can end a sentence

   食べられるそうです。 I heard it's edible.
   彼が書いたそうです。 I heard he wrote it.
   彼がやらせるそうです。 I heard he would make her do it.

So the original sentence means the same thing as Option 3.

Please do not confuse this そう with そう meaning "to seem", "to look" or "to be about to ～"

来そうです。 Looks like he's coming.
おいしそうです。 Looks delicious.
簡単そうです。 It seems easy.
食べられそうです。 This seems to be edible.