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Answer is correct it is 3 IPs and 32 Subnets as smallest subnet in Azure is /29 dues to 5 reserved IPs out of any subnet and largest is /2 - example here from MS
Are there any restrictions on using IP addresses within these subnets?
Yes. Azure reserves the first four and last IP address for a total of 5 IP addresses within each subnet.
For example, the IP address range of 192.168.1.0/24 has the following reserved addresses:
192.168.1.0 : Network address
192.168.1.1 : Reserved by Azure for the default gateway
192.168.1.2, 192.168.1.3 : Reserved by Azure to map the Azure DNS IPs to the VNet space
192.168.1.255 : Network broadcast address.