The correct option is It enforces a per command time limit within the step and fails the step if any single command exceeds it. This means the configured timeout is applied to each command that runs inside the step and if any one command runs longer than the limit the step fails and the workflow proceeds according to its failure behavior.

This setting is useful when you want to prevent a single long running command from blocking the pipeline. It provides granular protection at the command level rather than only at the step or job level and it ensures the step fails quickly when an individual command exceeds the threshold.

It defines the upper limit for the entire job duration is incorrect because that describes a job level timeout which applies to the whole job and not to individual commands within a single step.

It sets how long the workflow waits for an external trigger such as a webhook or approval before continuing is incorrect because timeouts do not control waiting for external events or manual approvals and those are governed by different workflow mechanisms.

It caps the total runtime of the step as a whole and cancels it once that duration is reached is incorrect because this would end the entire step after the specified time whereas the setting in question focuses on each command within the step and fails the step if any single command exceeds the limit.

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