Welcome to Microsoft Q&A! Thanks for posting this question.
If I understand your question correctly, this is your scenario:
Test app "W1" ---> Resource Group "RG1" ---> ASP "HOST1"
Prod app "W2" ---> Resource Group "RG7" ---> ASP "HOST1"
2Test app "W3" --> Resource Group "RG1" ---> ASP "HOST1"
You mentioned you want to move W3 to RG1. Is this your desired outcome?
W3 --> RG1 -->HOST1
It looks like your 2nd 'Test' webapp 'W3' is already in resource group 'RG1'. What app service plan is W3 in? Are all the apps in the same region?
You can move an app to another App Service plan, as long as the source plan and the target plan are in the same resource group and geographical region.The region in which your app runs is the region of the App Service plan it's in. If you want to run your app in a different region, one alternative is app cloning. Cloning makes a copy of your app in a new or existing App Service plan in any region.
Please see this documentation for more information.