Traffic didnt match any other policies and so landed at the implicit "deny all" policy. If it's deny all, the traffic was dropped before the application could be determined. https://knowledgebase.paloaltonetworks.com/KCSArticleDetail?id=kA10g000000ClibCAC

Decryption Mirror is a feature that allows a Palo Alto Networks firewall to send a copy of decrypted traffic to an external security device or tool for further analysis. The potential risk associated with Decryption Mirror is that if the firewall administrator's credentials are compromised, a malicious user could potentially access sensitive decrypted information. Hence, it's advised to be cautious and ensure proper handling of this feature.
Additionally, laws and regulations regarding the decryption, storage, inspection, and use of SSL/TLS encrypted traffic vary by country and industry. It is crucial to ensure compliance with relevant laws and best practices when using Decryption Mirror. This often requires consultation with corporate legal counsel to understand the implications and ensure that the use of such features does not violate privacy laws or regulatory requirements.
The need for administrative consent and the legal implications of using Decryption Mirror features are outlined in Palo Alto Networks' "PAN-OS Administrator's Guide" and best practice documentation. It is not specifically required to have a tap interface to use Decryption Mirror, which eliminates option A. Option C is incorrect because it is not just management consent but legal compliance that needs to be considered.

https://docs.paloaltonetworks.com/globalprotect/9-1/globalprotect-admin/globalprotect-gateways/split-tunnel-traffic-on-globalprotect-gateways/configure-a-split-tunnel-based-on-the-domain-and-application