
Explanation

Box 1: Yes.
App1 is a protect app in the Windows Information Protection policy. File1 is stored on Server1 which is in the Network Boundary defined in the policy. Therefore, you can open File1 in App1.
Box 2: Yes.
App2 is exempt in the Windows Information Protection policy. The protection mode in the policy is block so all apps that are not included in the policy cannot be used to open the file... except for exempt apps.
Therefore, you can open File1 in App2.
Box 3: No.
The protection mode in the policy is block so all apps that are not included in the policy as protected apps or listed as exempt from the policy cannot be used to open the file. Therefore, you cannot open File from in App3.
Reference:
https://docs.microsoft.com/en-us/windows/security/information-protection/windows-information-protection/crea