Hello @AZLearner-5762 ,
Yes, you can allow all outbound traffic to Azure services such as Storage Account, Key Vault, Recovery services vault, Azure SQL, etc, by adding an outbound rule with destination = service tag and destination service tag = "AzureCloud". There is no risk to allow this service tag because Microsoft manages the address prefixes encompassed by the service tag and automatically updates the service tag as addresses change, minimizing the complexity of frequent updates to network security rules and providing network isolation and protecting your Azure resources from the general Internet.
AzureCloud Service tag can be regional which means if you would like to access a few regional Azure Public resources such as SQL, Storage etc, you can refine your NSG to only allow those regional Azure clouds and not all.
SQL represents Azure SQL Database, Azure Database for MySQL, Azure Database for PostgreSQL, and Azure SQL Data Warehouse service for all regions. You may add SQL to allow all region IP addresses or can select specific regional SQL service tag as per your requirement.
You can see the list of IP addresses for the whole SQL service as well as the parts of regional SQL service here.
Hope this helps!
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