In distributed training and processing jobs, multiple instances and containers communicate with each other over the network to exchange gradients, parameters, and intermediate results. Even when jobs run inside a private VPC, network traffic between instances is not automatically encrypted at the application layer.

AWS documentation for Amazon SageMaker specifies that inter-container traffic encryption is the supported mechanism for encrypting data in transit between containers that participate in distributed training or processing jobs. When enabled, SageMaker uses TLS to encrypt all communication between containers across instances, ensuring confidentiality and compliance with security requirements.

Option A (network isolation) prevents containers from making outbound network calls but does not encrypt traffic between distributed instances. Option B is incorrect because security groups control traffic access, not encryption. Option D (VPC flow logs) is a monitoring feature and does not provide encryption.

Therefore, enabling inter-container traffic encryption is the correct and AWS-recommended solution.