Windows 10 How is the Networking regulated in Virtual Machines?

It functions this way because the virtual machine exists on the host machine, and the host machine's firewall rules are typically tied to operations, software, and events taking place on the host machine itself. Because the guest operating system is virtualized, it has its own software firewall rules and virtualized network adapter that are segmented/isolated from the host.

The VM software you are using most likely has several network adapter options including Bridge Mode, NAT, and Host-only. If you use NAT your guest VM will share the same IP as the host. If you use bridge, the host's router will assign it as a local device on the same network as the host (unique IP on the LAN). Host-only will let you route through a token ring or non-Ethernet network. In a host-only setup, the VM software itself acts as a sort of DHCP server and software router.

Typically the VM appliance, if it is software like Hyper-V, VMware Workstation, or VirtualBox, has unrestricted access to the same router the host machine is connected to. There are ways to create a virtual firewall or switch, but that depends on what you are using. One easy solution might be to export the firewall rules on the host machine and import them to the VM's guest OS (presumably Windows), making whatever changes you may see necessary.

You should be able to define firewall rules on your physical router that affect both the host machine and the virtual machine(s).