B is correct option , as current policy prevents creation of sql servers in sub1 , but due to exclusion , only inside ContosoRG1 , you can create sql servers.
The correct answer is B. The policy only applies to the resource group ContosoRG1 and allows the creation of Azure SQL servers only in that resource group. The policy does not prevent the creation of Azure SQL servers in other resource groups in Subscription 1.
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