Hello @Amar-Azure-Practice ,
Thanks for your query ! If the VM is enabled with System Assigned Managed Identity all the services running should be able to authenticate by using the same identity token provided by Azure Instance Metadata. But if there is any piece of code/Application which is trying to retrieve secrets from Key Vault you will have to grant your code/application access to the specific secret or key in Key Vault by using the Access policies section of the Key Vault from Azure Portal.
In the Key Vault -> Access Policies -> Add Policy -> Key Management
How Managed Identity works:
https://learn.microsoft.com/en-us/azure/active-directory/managed-identities-azure-resources/how-managed-identities-work-vm
More significantly check out :
https://learn.microsoft.com/en-us/azure/active-directory/managed-identities-azure-resources/how-managed-identities-work-vm#system-assigned-managed-identity
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