What is the L2 agent? How does it works and what is it responsible for?

The L2 agent is a service that runs on each compute node and is responsible for wiring virtual networks to instances. It communicates with the Neutron server to get the network topology and then configures the local virtual switch (e.g., Open vSwitch) to connect instances to the correct networks. It also enforces security group rules by configuring the virtual switch.