I think you'd need to test it - the feature is not designed for that use case, it's designed for traffic flowing across AutoVPN tunnels only (it's called Site-to-site VPN translation, after all: https://documentation.meraki.com/MX/Site-to-site_VPN/Using_Site-to-site_VPN_Translation ) As I understand it the traffic in this case would need to be routed locally by MX2 alone. I'd be surprised if it works, personally. What's preventing 10.0.1.10 from being configured to communicate directly with 10.0.1.11? That traffic wouldn't even need to hit the MX.
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