As per the Microsoft SC-300 Study Guide and Azure Key Vault documentation, when you enable a system- assigned managed identity for a resource (in this case, Automation1), that identity can be granted permissions to specific Key Vault resources using Azure role-based access control (RBAC).
Since the requirement states that Automation1 must be able to read only one secret (Secret1) and not other secrets in the vault, you must assign permissions at the Secret level - not at the vault level. Assigning permissions at the Vault1 level (option A) would potentially allow access to all secrets, violating the principle of least privilege.
Therefore, you must go to Secret1 # Access control (IAM) and assign the Key Vault Secrets User role (or similar least-privileged role) to the system-assigned identity of Automation1.
This aligns with Microsoft's documentation:
"To restrict access to individual secrets or keys, use Azure role assignments at the specific secret, key, or certificate level rather than the vault level."