In an IS-IS design, placing the Level-1/Level-2 (L1/L2) boundary at the core limits the extent of the flooding domain, improving scalability and stability.
By limiting Level-2 flooding to the core, instability or frequent changes in the access/distribution layers (typically Level-1) do not impact the core.
The core remains stable, while routing changes are isolated within the Level-1 domains.
Other options explained:
A: Overlapping domains are not a design objective.
B: This has no direct impact on Layer 1 complexity.
C: IS-IS design must match topology hierarchy; this is not universally applicable.
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