Explanation:
Graphical user interface, text, application, chat or text message Description automatically generated

Box 1: Modify
Modify is used to add, update, or remove properties or tags on a resource during creation or update. A common example is updating tags on resources such as costCenter. Existing non-compliant resources can be remediated with a remediation task. A single Modify rule can have any number of operations.
Box 2: A managed identity with the Contributor role
Managed identity
How remediation security works: When Azure Policy runs the template in the deployIfNotExists policy definition, it does so using a managed identity. Azure Policy creates a managed identity for each assignment, but must have details about what roles to grant the managed identity.
Contributor role
The Contributor role grants the required access to apply tags to any entity.
Reference:
https://docs.microsoft.com/en-us/azure/governance/policy/concepts/effects
https://docs.microsoft.com/en-us/azure/governance/policy/how-to/remediate-resources
https://docs.microsoft.com/en-us/azure/azure-resource-manager/management/tag-resources
https://docs.microsoft.com/en-us/azure/governance/policy/concepts/effects#modify