From Azure WebApps stand-point (tag - azure-webapps) - As AgaveJoe mentioned, the default value is (Production).
On App Service, for ASP.NET Core (also ASP.NET ), setting app settings are like setting them in <appSettings> in Web.config or appsettings.json, but the values in App Service override
the ones in Web.config or appsettings.json.
Just to highlight, The ASPNETCORE_ENVIRONMENT environment variable can be added to web.config to run the app in the Development environment. As long as the environment isn't overridden in app startup by UseEnvironment on the host builder, setting the environment variable allows the Developer Exception Page to appear when the app is run.
See this doc for more details - ASP.NET Core reads from the following environment variables.
Also, as a side note that setting the environment variable for ASPNETCORE_ENVIRONMENT
is only recommended for use on staging and testing
servers that aren't exposed to the Internet.