During Installation of linux/windows on any physical machine, its not mandatory to apply/use firewall or iptable rule.its our choice. we can continue with the installation even if we donot use firewall. same case must be applicable with VMs.

You are not understanding the concept!! In a qcow2 image i.e the glance image there is no iptables/firewall enabled, so security groups provide that functionality. Just for your knowledge install windows/linux in a virtual/physical machine and see it for yourself if it is enabled or not.

It's upto one whether he/she uses it or not but by default the system has firewall/iptables enabled, which maybe disabled after installation. Hope you get it.

I have installed the same , and I could find the option of disabling firewall prior to complete installation. for linux :- http://tutmaster.com/how-to-install-red-hat-linux-complete-step-by-step-guide/ (http://tutmaster.com/how-to-install-r...) for ubuntu :- its disabled by default. ( installed but disable

So , I suppose, it cannot be related to live installations.