Azure VNET Peering is a way to securely connect 2 Virtual Networks within Azure. When connected in the same region, latency times between the 2 networks will be the same as within the same network. When peering VNETs in different regions, traffic flows across the Azure backbone network to the new region.
VNET Peering is an alternative to S2S VPNs, however it comes with some unique limits & constraints. VNET Peering tends to be faster than a VPN because traffic does not need to be encrypted and passed across VPN Gateways.
1 & 2) The VNETS can be in the same or different subscriptions or tenants.
3) Gateway Transit with VNET Peering is so that peered connections can access a remote gateway. Peered connections can only access other VNET's gateways in 1 direction of a connection. For example, if I have 2 VNETS in Azure, both with a VPN Gateway that connects to separate on-premise sites, only one of the VNETs will be able to communicate across the other VNETs Gateway. Gateway Transit allows you to configure the direction. The region or subscription does not matter for gateway transit.
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