what is the reason for not showing availability set when placing a VM in a location different from the location of the availability set.
Actually I wanted to deploy 2 VM's in different locations to achieve high availability and disaster recovery of these VM's, which minimizes the cost and avoiding the unnecessary cost for the restriction on minimum 2 VM's (Fault domains) cost in the same location which does not provide disaster recovery.
It is not possible.
Please refer to this official document.
An Availability Set is a logical grouping capability that you can use in Azure to ensure that the VM resources you place within it are isolated from each other when they are deployed within an Azure datacenter. Azure ensures that the VMs you place within an Availability Set run across multiple physical servers, compute racks, storage units, and network switches. This ensures that in the event of a hardware or Azure software failure, only a subset of your VMs will be impacted, and your overall application will stay up and continue to be available to your customers. Using Availability Sets is an essential capability to leverage when you want to build reliable cloud solutions.
VMs in a Availability Set must need in a same location.
According to your need, you could use managed disk, please refer to this link.
Managed disks provide better reliability for Availability Sets by ensuring that the disks of VMs in an Availability Set are sufficiently isolated from each other to avoid single points of failure.