@kumar kaushal I had discussion internally and got below response from our internal team:
1) If they select Active Directory in the portal when creating a host pool, they need to specify the FQDN of their AD domain and also optional the OU path were the VM should land in. If they don't specify an OU, it will land in computers container.
If this DC running in Azure is part of their on-premises AD as an additional DC, it doesn't make any difference. AD connect sync is only required once. If they want to build up an isolated AD in Azure with DCs running as VMs, they can do that, but this would then require an additional sync and also in most cases a separate AAD tenant. Seems to be a lot of overhead.
2) AVD relies on the UPN, so, as long as the configure the UPN properly to match between AAD and AD, it will work.
Hope it helps!!!
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