Developer SKU of Azure APIM deployed in a VNET not sending welcome email on user signup

There are two separate things to check here: email delivery from the developer portal and APIM resource logs.

For the welcome email, first confirm that the built-in notification is enabled and that the email template is valid. In APIM, go to Developer portal > Notifications and verify the user-signup or account-confirmation notification path. If you use custom SMTP or your APIM is locked down by NSGs/UDRs/firewall, make sure outbound SMTP/email-provider traffic is allowed. The user being created as inactive usually means the signup path ran, but the activation email path failed or was blocked.

For Log Analytics, do not expect traffic until a diagnostic setting is configured on the APIM resource and a log category is selected. After enabling it, query the resource-specific table such as `ApiManagementGatewayLogs` and allow a few minutes for ingestion. Also check that you are configuring diagnostics on the APIM instance, not only on Application Gateway.

Useful docs:

https://learn.microsoft.com/azure/api-management/api-management-howto-configure-notifications

https://learn.microsoft.com/azure/api-management/monitor-api-management

https://learn.microsoft.com/azure/api-management/api-management-using-with-internal-vnet