it provides: Isolation between VPC networks, Separate on-premises links, Separate Cloud DNS private zones and forwarding zones

Option A (Customizing operating system DNS configuration files) may introduce complexity and operational overhead, as it would require manual configuration on each workload instance, potentially leading to inconsistencies and management challenges. Option C (Peering Department A's and Department B's VPC networks) could introduce complexity and potentially compromise isolation between the departments, as peering would allow direct communication between the VPC networks. Option D (Configuring Cloud DNS Peering zone and outbound forwarding zone) introduces unnecessary complexity and potential security risks by allowing direct DNS communication between the departments' VPC networks.

I take it back, D is the answer. When we have two forwarding Cloud DNS zones, the replies from the on-premises DNS may directed towards other VPCs: Do not use outbound forwarding to your on-premises DNS servers from multiple VPC networks because it creates problems with the return traffic. Google Cloud accepts responses from your DNS servers only if they're routed to the VPC network from which the query originated. However, queries from any VPC network have the same IP range 35.199.192.0/19 as source. Therefore, responses can't be routed correctly unless you have separate environments on-premises.