Unfortunately this is NP-hard, so there are probably no polynomial-time algorithms to solve it. Here is a reduction from the NP-hard problem Independent Set, where we are given a graph G = (V, E) (with n = |V| and m = |E|) and an integer k, and the task is to determine whether it is possible to find a set of k or more vertices such that no two vertices in the set are linked by an edge:
- For every vertex v_i in G, create a red vertex r_i in H.
- For every edge (v_i, v_j) in G, create the following in H:
- a black vertex b_ij,
- n+1 red vertices t_ijk (1 <= k <= n+1),
- n black vertices u_ijk (1 <= k <= n),
- n edges (t_ijk, u_ijk) (1 <= k <= n)
- n edges (t_ijk, u_ij{k-1}) (2 <= k <= n+1)
- the three edges (r_i, b_ij), (r_j, b_ij), and (t_ij1, b_ij).
- For every pair of vertices v_i, v_j, create the following:
- a black vertex c_ij,
- the two edges (r_i, c_ij) and (r_j, c_ij).
- Set the threshold to m(n+1)+k.
Call the set of all r_i R, the set of all b_ij B, the set of all c_ij C, the set of all t_ij T, and the set of all u_ij U.
The general idea here is that we force each black vertex b_ij to choose at most 1 of the 2 red vertices r_i and r_j that correspond to the endpoints of the edge (i, j) in G. We do this by giving each of these b_ij vertices 3 outgoing edges, of which one (the one to t_ij1) is a "must-have" -- that is, any solution in which a t_ij1 vertex is not selected can be improved by selecting it, as well as the n other red vertices it connects to (via a "wiggling path" that alternates between vertices in t_ijk and vertices in u_ijk), getting rid of either r_i or r_j to restore the property that no black vertex has 3 or more neighbours in the solution if necessary, and then finally restoring connectedness by choosing vertices from C as necessary. (The c_ij vertices are "connectors": they exist only to ensure that whatever subset of R we include can be made into a single connected component.)
Suppose first that there is an IS of size k in G. We will show that there is a connected induced subgraph X with at least m(n+1)+k red nodes in H, in which every black vertex has at most 2 neighbours in X.
First, include in X the k vertices from R that correspond to the vertices in the IS (such a set must exist by assumption). Because these vertices form an IS, no vertex in B is adjacent to more than 1 of them, so for each vertex b_ij, we may safely add it, and the "wiggling path" of 2n+1 vertices beginning at t_ij1, into X as well. Each of these wiggling paths contains n+1 red vertices, and there are m such paths (one for each edge in G), so there are now m(n+1)+k red vertices in X. Finally, to ensure that X is connected, add to it every vertex c_ij such that r_i and r_j are both in X already: notice that this does not change the total number of red vertices in X.
Now suppose that there is a connected induced subgraph X with at least m(n+1)+k red nodes in H, in which every black vertex has at most 2 neighbours in X. We will show that there is an IS in G of size k.
The only red vertices in H are those in R and those in T. There are only n vertices in R, so if X does not contain all m wiggly paths, it must have at most (m-1)(n+1)+n = m(n+1)-1 red vertices, contradicting the assumption that it has at least m(n+1)+k red vertices. Thus X must contain all m wiggly paths. This leaves k other red vertices in X, which must be from R. No two of these vertices can be adjacent to the same vertex in B, since that B-vertex would then be adjacent to 3 vertices: thus, these k vertices correspond to an IS in G.
Since a YES-instance of IS implies a YES-instance to the constructed instance of your problem and vice versa, the solution to the constructed instance of your problem corresponds exactly to the solution to the IS instance; and since the construction is clearly polynomial-time, this establishes that your problem is NP-hard.
