If a smaller object is $100\%$ encompassed by a larger object in PowerPoint, what happens if you select both objects and Middle align them $($Alt$,1,$ M$)?$

The larger object aligns itself to the Middle of the smaller object.

Both the smaller and larger objects align themselves to the middle of the total combined area of the two shapes.

The smaller object aligns itself to the Middle of the larger object.

Nothing happens, this type of alignment is impossible in PowerPoint.