
Explanation:
Box 1: No
The source database DB1 will not be affected.
Box 2: Yes
The source database is available during a Copy-AzSqlInstanceDatabase operation. The operation creates a copy of the source database on a destination instance, and the source database remains online and fully functional throughout the process and after it is completed. The copied database is a transactionally consistent snapshot of the source database at the time the copy request is initiated.
Box 3: No
The Copy-AzSqlInstanceDatabase operation does not utilize backup and restore operations to copy a database. It uses a geo-replication technology to create a transactionally consistent snapshot of the source database.
Reference:
https://learn.microsoft.com/en-us/powershell/module/az.sql/copy-azsqlinstancedatabase