When you apply a tag to an Azure resource group, the tag is applied only to the resource group itself and is not inherited by the resources inside the group; therefore, to group the costs of those resources by that tag in Azure Cost Management, the tag must be applied directly to each individual resource.
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The statement is correct because Azure resource tags are not inherited. When you apply a tag to a resource group, it does not propagate to the resources inside that group. To run a cost analysis report that groups resource costs by a specific tag, that tag must be applied directly to the individual resources that incur the charges.
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Azure resource tags are not inherited by resources from their parent resource groups or subscriptions.