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The TrafficPolicy is a monolithic API that supports attachment at various points in the routing hierarchy:
Individual HTTPRoute rule level (either via sectionName on the CR or via ExtensionRef on the rule definition)
HTTPRoute wide
Listener & xListenerSet wide
Gateway wide
Invalid policy attached Gateway-wide or Listener-wide can produce Envoy NACKs (e.g. malformed transformation template). The first two attachment points listed above are already handled. The remaining higher-level scopes are not, and a failure here can block unrelated routes, halt routing updates, and cause a large blast radius across the data plane.