Firewall Rule Analysis: Analyze the existing VPC firewall rules to identify any rules that might allow traffic between VM instances based on the same service account.

Priority Check: Check the priority of these rules. A rule with a priority lower than 1000 (such as 999) will take precedence over your tag-based rules.

Service Account Configuration: Since your VM instances are deployed without any service account customization, they are likely using the default service account. A firewall rule allowing traffic between instances using this default service account will override the tag-based rules if it has a higher priority.

Testing and Validation: Disable or adjust the priority of the rule with priority 999 to test if the tag-based segmentation works correctly. Validate that the traffic is segmented according to your intended configuration. References:

Google Cloud - VPC Firewall Rules

Google Cloud - Service Accounts