Based on the exhibit, what should the administrator do so the hub and spoke can be peered successfully?
Azure VNet peering requires that the address spaces of the two virtual networks do not overlap, so the spoke's current CIDR range is blocking the connection. You must change the spoke to a non-overlapping address space—usually by recreating the VNet with a unique range or by adding a new non-conflicting prefix and migrating resources—before peering can be established. This is the only remediation that removes the underlying route conflict with the hub.
Why this answer
VNet peering requires that the address spaces of the peered VNets do not overlap. Overlapping IP ranges cause routing conflicts and prevent successful peering. Changing the spoke VNet to a non-overlapping address space resolves this issue and allows the peering to be established.
Exam trap
The trap here is that candidates may think overlapping subnets can be worked around by using NSGs or gateway transit, but Azure VNet peering strictly requires non-overlapping VNet address spaces at the time of peering creation.
Why the other options are wrong
The hub and spoke VNets have overlapping address ranges (10.1.0.0/16), which prevents peering. Enabling gateway transit does not resolve address overlap; peering requires non-overlapping address spaces.
Adding another subnet inside the spoke VNet does not resolve the overlapping address space issue; the hub and spoke VNets still have conflicting IP ranges, which prevents successful peering.
The question is about resolving overlapping address spaces between hub and spoke VNets for successful peering. Creating a network security group (NSG) on the spoke subnet does not address the address overlap issue; NSGs control traffic filtering, not IP address conflicts.