To which subnets can NSG1 be applied based on their resource group location?

The correct choice is the subnets on VNet3 because Network Security Groups (NSGs) in Azure are primarily associated with the same region where they were created. When NSG1 is created in a specific resource group, it can only be applied to resources such as subnets or network interfaces that reside within the same region as the resource group.

In the context of your question, if NSG1 was created in a resource group that is associated with VNet3’s region, then it can only be applied to the subnets that are part of VNet3. This is due to the restrictions on resource organization and management in Azure, reinforcing the principle of keeping resources within their designated geographic locations for performance and compliance.

To summarize, the association of an NSG with specific subnets is determined by the geographic region of its creation, making subnets on VNet3 the only valid choice for applying NSG1 in this scenario.