The given answer is correct, look at the top section there is an exclusion in this subscription that allow the admin to create the database in the resource group.
The answer is correct. Please check the question very carefully. Here has one Exclusion which is Subscription/ContosoRG1 so that means all the restrictions does work in ContosoRG1.
A policy exclusion allows you to assign policy at a high level and then exclude scopes within it. For example, in an environment with applications and central network, you want to have a policy for all application resource groups but not the network resource group. Previously, you had to assign different policies on all application resource groups. With exclusion scope, you can assign the policy at the subscription scope, so that even new application resource groups are automatically governed when they are created.
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