i think that's wrong because using PaaS you don't have full control over the operating system and you can't install your "legacy DB". So you need IaaS.
One solution would be to use a new DB within azure - that would be PaaS.
the question indicates that Only the app is migrating to the cloud, at that point nothing suggest that the DB would follow.
so assuming only the app is concerned by the migration to cloud, PaaS is a logic answer
You have to read this very carefully. It only states that the APP is being moved to the Cloud. There is no indication in this text that the database must be moved or must be installed on a VM as well.
So the APP is PAAS.
(And yes, seperated from this question. A Hybrid Cloud is probably needed)