@Rohan Aluguri - Welcome to Microsoft Q&A and thanks for reaching out to us.
From what you have explained, the most possible reason could be that IP forwarding is disabled on the virtual appliance VM. IP forwarding allows a VM to receive incoming traffic that is not addressed to itself and forward it to other destinations.
If you haven't enabled it yet, please do so by navigating to virtual appliance VM, click on Networking and then click on network interface associated with the VM. Under IP configurations, click on the IP configuration associated with network interface, and under IP forwarding select "Enabled".
Or there could be other reasons like:
- Check the routing table on the source and destination VMs to ensure that the routes are correctly configured.
- Check the IP tables on the virtual appliance VM to ensure that they are correctly configured.
- Use a packet capture tool like Wireshark to capture the traffic between the source and destination VMs and analyze the packets to see if they are being forwarded by the virtual appliance VM.
Hope this helps. and please feel free to reach out if you have any further questions.
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