Your understanding is correct

North-South:

Green segments go to public (internet) via T0 on Location-C, Blue segments go to public (internet) via T0 that resides on Location-A

And this wherever location the Blue or Green VMs are.

East-West:

The router attached to the Segment is distributed.

So for instance

• The Location-B_VM_Blue_TopSegment talking to the Location-B_VM_Blue_BottomSegment will have its L3 traffic in Location-B only
• The Location-A_VM_Green_TopSegment talking to the Location-B_VM_Green_BottomSegment will have its L3 traffic between Location-A and Location-B (not Location-C)
•