Which of the following is true about overlay networks?

This is incorrect because overlay networks are designed for multi-host communication and are therefore distributed across the entire swarm, not confined to a single manager node.

When an overlay network is created in a Docker Swarm, it is automatically extended to all manager and worker nodes within that swarm. This allows containers on any node to communicate seamlessly over the overlay network, providing a unified networking plane for distributed applications.

While manager nodes coordinate the creation, the overlay network is effectively available on all nodes simultaneously for container use, not in a staged fashion from managers to workers.

This is incorrect because overlay networks are essential for worker nodes to host containers that need to communicate across the swarm, making them available on all nodes.