Quarantine Policy is always enabled in the Native Cloud Enforced Mode.

Table 1. Assignment of Public Cloud Security Groups in the Native Cloud Enforced Mode

Is VM part of a valid NSX-T Security policy?

Is VM added to the User Managed List? VM's public cloud security group and explanation
Yes, VM is matched with a valid NSX-T Security Policy Not added to User Managed List NSX Cloud-created public cloud security group named like nsx-{NSX-GUID} which is the corresponding public cloud security group for the NSX-T Security Policy.
No, VM does not have a valid NSX-T firewall policy Not added to User Managed List default-vnet-<vnet-ID>-sg in Microsoft Azure or default in AWS because this is the threat detection behavior of NSX Cloud. In the Native Cloud Enforced Mode, the NSX Cloud-created security groups default-vnet-<vnet-ID>-sg in Microsoft Azure or default in AWS mimic the default public cloud security policy.
Note: In CSM the VM shows an Error state.
Yes, VM has valid NSX-T Security policy Added to User Manged list Retains existing public cloud security group because NSX Cloud doesn't take any action on VMs added to the User Managed list.
No, VM does not have a valid NSX-T Security policy