If instead you want to automatically apply the policy to existing in-scope resources, choose Auto remediate any noncompliant resources. This option creates a web ACL in each applicable account within the AWS organization and associates the web ACL with the resources in the accounts. When you choose Auto remediate any noncompliant resources, you can also choose to remove existing web ACL associations from in-scope resources, for the web ACLs that aren't managed by another active Firewall Manager policy. If you choose this option, Firewall Manager first associates the policy's web ACL with the resources, and then removes the prior associations. If a resource has an association with another web ACL that's managed by a different active Firewall Manager policy, this choice doesn't affect that association.

Step 1: Deploy the Automation Solution using CloudFormation StackSets
To automate the process across multiple AWS accounts within an organization, you can use AWS CloudFormation StackSets. StackSets allow you to deploy CloudFormation templates to multiple accounts within an organization, ensuring consistent infrastructure and automation.
Action: Use AWS CloudFormation StackSets to deploy the necessary resources across all AWS accounts.
This includes deploying the Lambda function and security groups that will isolate compromised EC2 instances.
Why: StackSets make it easy to deploy and manage resources across multiple AWS accounts, reducing the operational overhead.
Reference: AWS documentation on CloudFormation StackSets.
This corresponds to Option A: Use AWS CloudFormation StackSets to deploy the CloudFormation stacks in all AWS accounts.
Step 2: Isolate EC2 Instances using Lambda and Security GroupsWhen an EC2 instance is compromised, it needs to be isolated from the network. This can be done by creating a security group with no inbound or outbound rules and attaching it to the instance. A Lambda function can handle this process and can be triggered automatically by an Amazon EventBridge rule when a specific tag (e.g., " isolation " ) is applied to the compromised instance.
Action: Create a Lambda function that attaches an isolated security group (with no inbound or outbound rules) to the compromised EC2 instances. Set up an EventBridge rule to trigger the Lambda function when the " isolation " tag is applied to the instance.
Why: This automates the isolation process, ensuring that any compromised instances are immediately cut off from the network, reducing the potential damage from the compromise.
Reference: AWS documentation on Tag-based Event Handling.
This corresponds to Option E: Create an AWS CloudFormation template that creates an EC2 instance role that has no IAM policies attached. Configure the template to have a security group that has no inbound rules or outbound rules. Use the CloudFormation template to create an AWS Lambda function that attaches the IAM role to instances. Configure the Lambda function to replace any existing security groups with the new security group. Set up an Amazon EventBridge rule to invoke the Lambda function when a specific tag is applied to a compromised EC2 instance.

The required tag must be applied to every EC2 instance launched by the Auto Scaling group. The cleanest solution is to place the tag specification in the EC2 launch template with ResourceType set to instance, then update the Auto Scaling group to the new launch template version and perform an instance refresh so existing capacity is replaced. AWS CloudFormation documentation for EC2 launch template tag specifications states that tags are applied to resources created during instance launch and that valid resource types include instance, volume, network-interface, and spot-instances-request. CodeDeploy deployment groups identify deployment targets but are not the right mechanism to tag every future instance. Tagging the AMI also does not guarantee that launched EC2 instances inherit the required application tag.

https://docs.aws.amazon.com/AmazonCloudWatch/latest/monitoring/install-CloudWatch-Agent-on-premise.
htmlhttps://docs.aws.amazon.com/xray/latest/devguide/xray-api-sendingdata.html

service catalog uses stacksets and can enforce tag and restrict resources AWS Customer case with tag enforcement https://aws.amazon.com/ko/blogs/apn/enforce-centralized-tag-compliance-using-aws-service-catalog-amazon-dynamodb-aws-lambda-and-amazon-cloudwatch-events/ And Youtube video showing how to restrict resources per user with portfolio https://www.youtube.com/watch?v=LzvhTcqqyog