Comprehensive and Detailed 250 to 350 words of Explanation From VMware Cloud Foundation (VCF) documents:

In theVMware Cloud Foundation (VCF) 9.0andNSX VPCarchitecture, theTransit Gateway (TGW)is the central routing element that interconnects VPCs to each other and to the provider's infrastructure (Tier-0 or VRF gateways). It acts as the "Project-level" gateway that aggregates North-South traffic.

To control the visibility of routes within a specific VPC, the administrator must utilizeRoute Filteringat the VPC's boundary. When a VPC is attached to a Transit Gateway, a logical interface is created. To prevent the data center's internal prefixes (such as management networks or other tenant subnets) from being seen by the VPC while still providing a path to the internet, a prefix list or route map should be applied to theVPC Transit Gateway. This policy will explicitly "Deny" specific internal CIDR ranges while "Permitting" the $0.0.0.0/0$ default route advertisement from the provider.

Applying the policy at theTier-1 gateway(Option B) is technically similar but in the VPC model, the "Tier-1" is often an obscured or automated component of the VPC itself; the Transit Gateway is the designed administrative point for inter-project and North-South policy enforcement. Applying it at theprovider Tier-0 neighbor(Option D) would be too global, affecting all VPCs or projects connected to that Tier-0, rather than the "new VPC" specifically. Therefore, the Transit Gateway provides the necessary granular control for multi-tenant isolation and routing optimization as per the VCF 9.0 networking model.

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