Box 1: No -
The Azure Policy will add Tag4 to RG1.
Box 2: No -
Tags applied to the resource group or subscription aren't inherited by the resources although you can enable inheritance with Azure Policy. Storage1 has Tag3:
Value1 and the Azure Policy will add Tag4.
Box 3: No -
Tags applied to the resource group or subscription aren't inherited by the resources so VNET1 does not have Tag2.
VNET1 has Tag3:value2. VNET1 is excluded from the Azure Policy so Tag4 will not be added to VNET1.
Reference:
https://docs.microsoft.com/en-us/azure/azure-resource-manager/management/tag-resources?tabs=json