What is teh preposition phrase in tis sentence the world has seen many wars, but the two world wars in the twentieth century have been particularly devastating?

The correct answer should be but the two world wars in the twentieth century

This is a preposition phrase functioning as a subject of a prepositional clause. It's the phrase because it starts with "but" which is used here as a preposition, and is followed by a noun phrase which is "the two world wars in the twentieth century". Phrases don't contain verbs because if they do then they became clauses or are verbal phrases.