Explanation
An overlay segment is a logical construct that provides Layer 2 connectivity between virtual machines that are attached to it. An overlay segment can span multiple hosts and can be extended across different subnets or locations using Geneve encapsulation3. Therefore, two virtual machines on the same overlay segment belong to the same Layer 2 broadcast domain, which means they can communicate with each other using their MAC addresses without requiring any routing. The other options are incorrect because they involve Layer 3 or higher network boundaries, which require routing or tunneling to connect different segments. References: VMware NSX Documentation