If VM1 connects to VNET1, what is the effect of recreating it when connecting to VNET2?

Choosing the option that states new configurations will need to be set up is the correct understanding of the situation when a VM, such as VM1, is recreated and connects to a different virtual network (VNET2) compared to its original network (VNET1).

When a virtual machine is connected to a specific virtual network, it is part of that network's configuration, including IP addressing, security groups, and routing rules. Recreating VM1 to connect to a different virtual network means that it will lose its previous configurations that were tied to VNET1 and will need to adopt the settings of VNET2. This includes acquiring a new IP address and adhering to the security and network settings defined for VNET2. The process essentially resets the VM's relationship with the network, necessitating new configurations to be established, as it has to comply with the policies and structure of the new network environment.

The other options don't align with how virtual networking functions in cloud environments. Maintaining previous connections, transferring connections automatically, or simultaneous connections to both networks are not standard capabilities when a virtual machine is recreated. Each VM's network association is unique to the specific virtual network it was connected to, emphasizing the need for reconfiguration upon moving to a new network.