The correct answer is B. an outbound rule that has a priority 100 and blocks all internet traffic.

Explanation:

To ensure that the Azure Application Gateway v2 (AppGw1) will only load balance traffic that originates from VNet1, you need to add an outbound rule to the network security group (NSG1) that is linked to Subnet1.

The key requirements are:

1. The solution must minimize the impact on the functionality of AppGw1.
2. The traffic that needs to be allowed is the traffic originating from VNet1.

By adding an outbound rule with a priority of 100 that blocks all internet traffic, you can achieve the desired result without impacting the functionality of AppGw1.

Here's the reasoning:

- The Application Gateway needs to be able to send traffic to the internet to load balance the traffic to the backend pools. If you block all outbound traffic, it will break the functionality of the Application Gateway.
- By adding the outbound rule with a priority of 100, it will be processed before the default "DenyAllOutbound" rule, which has a priority of 65500. This ensures that the traffic originating from VNet1 is allowed to pass through, while all other outbound traffic is blocked.

The other options are not correct:

A. An inbound rule that blocks all internet traffic would not be the correct solution, as the Application Gateway needs to receive inbound traffic from the internet.
C. An outbound rule with a priority of 4096 would be processed after the default "DenyAllOutbound" rule, which has a higher priority, and would not achieve the desired result.
D. An inbound rule with a priority of 4096 that blocks all internet traffic would not be the correct solution, as it would not address the requirement to allow traffic originating from VNet1....