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Based on my understanding from your question above. You have created two resource groups in the same region rg1 and rg2. You also created a virtual network named "vnet1" in rg1 in the same region. Now when you are creating a Network Interface in rg2 and have selected the "vnet1" from rg1 then same virtual network is created in rg2 with the same subnet name.
Based on the observation above, as documented here the name of a virtual network must be unique within a resource group, but can be duplicated within a subscription or Azure region. So, creating a virtual network with same name and region in different resource group is possible and within scope.
Now regarding your further observation above
Azure will clone existing "vnet1" and its subnets with the same virtual network and subnet names, same address space and subnets.
I tried reproducing the same scenario above, but it did not create same virtual network and subnet for me in rg2 and it successfully used the vnet from rg1 with the requested static private IP. I followed the documentation here to create a network interface.
Can you please validate if you selected the same options as above and still a new virtual network was created? if you used azure portal to create the network interface(NIC) before, can you please use AZ CLI commands to create the NIC and see if the issue persists. You can use the cloud shell to run the AZ CLI commands.
Hope this helps! Please let me know if you have any questions. Thank you!
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