**Core Concept**
Korsakoff psychosis is a neurological disorder caused by **thiamine deficiency**, leading to damage in the **dorsomedial thalamus** and **mamillary bodies**. It is characterized by **anterograde amnesia**, **confabulation**, and **lack of insight**.

**Why the Correct Answer is Right**
The correct answer is related to the fact that Korsakoff psychosis typically presents with **preservation of intellectual function** but **impairment of memory**, especially anterograde amnesia. The condition is also marked by a **lack of insight** into the patient's disability.

**Why Each Wrong Option is Incorrect**
**Option A:** Loss of remote memory is not a characteristic feature of Korsakoff psychosis, as patients typically have **preserved remote memory**.
**Option C:** Lack of insight is a common feature of Korsakoff psychosis, making this option incorrect.
**Option D:** While some cases may show improvement with thiamine treatment, Korsakoff psychosis is often **irreversible**.

**Clinical Pearl / High-Yield Fact**
A key point to remember is that Korsakoff psychosis often follows **Wernicke's encephalopathy**, and prompt treatment with thiamine can prevent its development.

**Correct Answer:** B. Loss of intellectual function but preservation of memory