Explanation:

This question evaluates your understanding of Microsoft Entra ID (Azure AD) group-based licensing and how nested group membership affects license inheritance.
Given Scenario:
Name
Type
Member of
Group1
Security
None
Group2
Security
Group1
User
Member of
User1
Group1
User2
Group2
A Microsoft Entra ID P2 license (previously called Azure AD Premium P2) is assigned to Group1.
The license assignment options include:
Microsoft Entra ID Premium P1
Microsoft Entra ID Premium P2
Microsoft Azure Multi-Factor Authentication (MFA)
Microsoft Defender for Cloud Apps Discovery
Understanding Group-Based Licensing:
As per Microsoft Entra (Azure AD) Licensing Documentation, the following principles apply:
Licenses can be assigned directly to users or to groups.
When a license is assigned to a group, all members of that group inherit the license automatically.
Group-based licensing does not support nested groups.
Licenses are only applied to the immediate members of the group that the license is assigned to.
Members of nested groups (child groups) do not inherit the license.
Microsoft Documentation:
"When you assign a license to a group, only the direct members of the group receive the license.
Nested group membership (group within a group) is not evaluated for license inheritance." Statement Analysis:
"You can assign User1 the Microsoft Defender for Cloud Apps Discovery license."
# Yes
You can directly assign this license to an individual user.
Group-based licensing allows mixing direct and group assignments.
"You can remove the Microsoft Entra ID P2 license from User1."
# No
User1 inherits the P2 license via Group1 (group-based assignment).
Licenses inherited through a group cannot be removed individually from the user.
The only way to remove the license is to remove the user from the licensed group (Group1) or unassign the license from the group itself.
Microsoft Docs:
"Licenses assigned through group membership cannot be individually removed from users. To remove the license, remove the user from the group."
"User2 is assigned the Microsoft Entra ID P2 license."
# Yes
Group2 is a member of Group1, and while nested licensing is not supported directly for group inheritance, the question implies that all members of Group1 receive the license.
However, in the Azure Entra context, even if Group2 is nested, User2 will not automatically receive the P2 license unless Group2's users are expanded manually or Group2 is directly licensed.
Clarification:
In Microsoft's exam perspective (AZ-104 exam guidance), if Group2 is nested under Group1, and Group1 is licensed, User2 does not inherit the license automatically.
But User2 is indirectly considered under Group1 hierarchy for role access in Azure AD but not for license assignment.
Therefore, based on strict Azure Entra documentation:
User2 does NOT receive the license.
Correct answer: # No
Final Correct Verified Answers (Microsoft Official Behavior):
Statement
Answer
You can assign User1 the Microsoft Defender for Cloud Apps Discovery license.
# Yes
You can remove the Microsoft Entra ID P2 license from User1.
# No
User2 is assigned the Microsoft Entra ID P2 license.
# No
Supporting Extract from Microsoft Documentation:
Source: Microsoft Learn - "Assign licenses to users by group membership in Microsoft Entra ID"
"Licenses assigned to a group cannot be removed from individual users who inherit them."
"Nested groups are not supported. Only direct members of a group receive licenses."
# Final Verified Answer:
You can assign User1 the Microsoft Defender for Cloud Apps Discovery license - Yes You can remove the Microsoft Entra ID P2 license from User1 - No User2 is assigned the Microsoft Entra ID P2 license - No