Box 1: Yes -
A Basic Load Balancer supports virtual machines in a single availability set or virtual machine scale set.
Box 2: Yes -
When using load-balancing rules with Azure Load Balancer, you need to specify health probes to allow Load Balancer to detect the backend endpoint status. The configuration of the health probe and probe responses determine which backend pool instances will receive new flows. You can use health probes to detect the failure of an application on a backend endpoint. You can also generate a custom response to a health probe and use the health probe for flow control to manage load or planned downtime. When a health probe fails, Load Balancer will stop sending new flows to the respective unhealthy instance. Outbound connectivity is not impacted, only inbound connectivity is impacted.
Box 3: No -
Reference:
https://docs.microsoft.com/en-us/azure/load-balancer/skus
https://docs.microsoft.com/en-us/azure/load-balancer/load-balancer-custom-probe-overview
