Microsoft AZ-700 - Questions & Answers

For the first question, only ExpressRoute GW SKU Ultra Performance support FastPath feature.
For the second question, vnet1 will connect to ExpressRoute gw, once Vnet1 peers with Vnet2, the traffic from on-premise network will bypass GW and Vnet1, directly goes to Vnet2, while this feature is under public preview.

====Reference
ExpressRoute virtual network gateway is designed to exchange network routes and route network traffic.
FastPath is designed to improve the data path performance between your on-premises network and your virtual network. When enabled, FastPath sends network traffic directly to virtual machines in the virtual network, bypassing the gateway.
To configure FastPath, the virtual network gateway must be either: Ultra Performance ErGw3AZ

VNet Peering - FastPath will send traffic directly to any VM deployed in a virtual network peered to the one connected to ExpressRoute, bypassing the ExpressRoute virtual network gateway.
https://docs.microsoft.com/en-us/azure/expressroute/about-fastpath

Gateway SKU
https://docs.microsoft.com/en-us/azure/expressroute/expressroute-about-virtual-networkgateways

Box 2: One NSG
The minimum requirement is one NSG. You could attach the NSG to VMScaleSet1 and restrict outbound traffic, or you could attach the NSG to VMScaleSet2 and restrict inbound traffic. Either way you would need two custom NSG rules.

Box 1: Two custom rules
With the NSG attached to VMScaleSet2, you would need to create a custom rule blocking all traffic from VMScaleSet1. Then you would need to create another custom rule with a higher priority than the first rule that allows traffic on port 443.
The default rules in the NSG will allow all other traffic to VMScaleSet2.

References:
https://docs.microsoft.com/en-us/azure/dns/private-dns-autoregistration
https://docs.microsoft.com/en-us/azure/virtual-network/virtual-networks-name-resolution-for-vms-and-role-instances

References:
https://docs.microsoft.com/en-us/azure/vpn-gateway/openvpn-azure-ad-tenant