What do Azure AD application permissions enable?

Azure AD application permissions enable applications to act on behalf of the user, performing actions that the user is permitted to do. This functionality is essential in scenarios where applications need to access resources or perform operations within Azure services as the user. For instance, if a user is using a web app that needs to access their calendar or emails, the application can utilize application permissions, which allow it to execute tasks on behalf of the user without requiring continuous user input.

This capability is particularly valuable for automated workflows, background services, or when applications need to interact with Azure resources that require user-level access and permissions. In essence, it facilitates a smoother integration of applications with Azure Active Directory while ensuring they operate within the permissions granted by the user.

The other choices do not encapsulate the core purpose of Azure AD application permissions. Granting access to applications for testing, for example, focuses more on the deployment and development aspects, rather than the operational behavior of applications. Restricting user permissions and managing user access without restrictions are more aligned with user and role management, rather than specifying the functionality provided by application permissions.