Explanation:

- All those students: This part introduces the subject and is grammatically correct.

- Who are participating: This clause correctly describes the students and contains no errors.

- In the play: This phrase provides context about where participation is happening; it is error-free.

- Have been notify: This part should actually be “have been notified.” The verb “notify” needs to be in past participle form to correctly match the perfect tense “have been”.

- Correct Answer: Option 3 - The error is here.

- To stay back for rehearsal: This is correctly structured as an instruction or requirement.

- After 3:00 p.m.: There is no grammatical error in specifying time here.