Answer
If $\theta$ is decreased, then light does not refract into material 3.
Work Step by Step
If $\theta$ is decreased, then the refracted angle in material 2 decreases.
Note that the incident angle at the interface between material 2 and material 3 is $90^{\circ}-\theta_2$ where $\theta_2$ is the refracted angle in material 2.
If the refracted angle in material 2 decreases, then the incident angle at the interface between materials 2 and 3 is increased which would make the incident angle greater than the critical angle.
In this case, none of the light refracts into material 3.
If $\theta$ is decreased, then light does not refract into material 3.
