Evaluating Each Option:
A. Splunk annotates data with only 3 metadata keys: host, source, and sourcetype.** ❌
* This happens during the **parsing or indexing phase**, not the input phase.
B. Splunk sets the character encoding of the data.** ✅
* This is a **core function** of the input phase.
C. Splunk looks at the contents of the data to apply the correct source.** ❌
* Splunk doesn't infer source from content; the **source** is generally assigned from the input path or connection.
D. Splunk breaks data into individual lines.** ❌
* This happens in the **parsing phase**, where event boundaries are determined.
B is the correct option. As per Splunk Cloud Administration manual, slide 279
"During the input phase, Splunk sets all input data to UTF-8 encoding..."
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