Private NAT Gateway to Site-to-Site VPN with Restricted CIDR

The NAT gateway operates without awareness of the specific CIDR ranges associated with the VPN. By default, it conducts source network address translation using its private IP address (derived from the subnet CIDR range) for traffic originating from private instances and heading towards the internet. In your case, the NAT gateway utilizes its private IP address from the CIDR range 172.16.4.0/27 for source address translation. It does not automatically adjust its translation behavior based on the specific IP addresses allowed in the site-to-site VPN configuration. If the remote side of the site-to-site VPN requires traffic from your VPC to carry a designated source IP address (e.g., 172.16.4.12/32), you may have to manage this translation within your private instances before the traffic reaches the NAT gateway. This could involve configuring your instances to use the specified source IP address in their outbound traffic.