Refer the below documentation about the Azure Arc-enabled servers.
https://learn.microsoft.com/en-us/azure/azure-arc/servers/overview#data-residency
So basically, the data at rest is stored within the Azure region you choose.
For each connected machine, the following meta data will be collected.
- Operating system name and version
- Computer name
- Computer fully qualified domain name (FQDN)
- Connected Machine agent version
Refer: https://learn.microsoft.com/en-us/azure/azure-arc/servers/overview#supported-regions
Hope this helps