When you're creating or updating a connection, you can specify its purpose. You have three main choices:
Sandbox Environments
Production Environments
Both Production and Sandbox Environments
Sandbox Environments
This is typically your own internal cloud account used for testing and development.
When you set the connection purpose to "Sandbox Environments," it will only show up in the dropdown menu during the creation of the App Environment for Sandbox environments.
Production Environments
This is for production workloads in either an internally or externally managed cloud account.
When you set the connection purpose to "Production Environments," it will only show up in the dropdown menu during the creation of the App Environment for Production environments.
Both Production and Sandbox Environments
This connection will be available for both production and sandbox environments.
When you set the connection purpose to "Both Production and Sandbox Environments," it will appear in the dropdown menu during the creation of the App Environment for both Production and Sandbox Environments
You can also define the type of connection (Internal or External). Want to know more about the difference between internal and external connections? Check out this article.