I think you will need a separate Azure Route Server (ARS) in the Transit VNet because ExpressRoute gateways does not support transitive routing between multiple ExpressRoute circuits. The ARS in the Hub VNet propagates on-premises routes to Azure VNets, but without an ARS in the Transit VNet, these routes wouldn’t reach the AVS-connected ExpressRoute circuit.
Azure VMware Solution - Need for ARS in Transit VNet
We are deploying Azure VMware Solution in region with ER Global Reach is not supported. Also, we've limitations in using Azure Virtual WAN to the existing landing zone. Due to these factors, we've decided to proceed with Transit VNet approach. https://learn.microsoft.com/en-us/azure/cloud-adoption-framework/scenarios/azure-vmware/example-architectures#scenario-2-an-nva-in-virtual-network-inspects-all-network-traffic
I've few confusions wrt the architecture, for eg: how the routes are propagated and why a separate ARS is needed in the Transit VNet since ARS in hub will propagate the on-premises routes to the transit VNet which in-turn will automatically propagate to the ExpressRoute gateway in the transit VNet and finally reaches AVS.
Can someone please help me with this ?