What should a solutions architect do to correct this issue?

Explanations:

Using instance IDs as the source or destination for security group rules does not apply the principle of least privilege effectively. Instance IDs are specific to individual instances and do not allow for flexible access control between application tiers. This can lead to overly permissive rules, violating least privilege.

Using security group IDs as the source or destination allows for a more granular control between application tiers. By specifying security groups, you can define which groups can communicate with each other, thereby applying the principle of least privilege and restricting access to only necessary services between tiers.

Using VPC CIDR blocks as the source or destination can lead to overly broad access rules that allow traffic from any instance within the specified CIDR block, thus violating the principle of least privilege. This approach does not restrict access to only the necessary components of the application.

Using subnet CIDR blocks as the source or destination for security group rules would also result in overly permissive access, allowing any instance within that subnet to communicate freely. This does not align with the principle of least privilege, which requires tighter control over which components can communicate with one another.