@Harsh Jasapara, Thanks for posting in Q&A. Based on my researching, I find in security baseline, there are policy we can set File Block Settings. Please check if such policy assigned to the device or user.
Meanwhile, please also check if any other policy which may related assigned to this affected device under Devices, the affected Device, Device Configuration in Intune portal.
Please check the above information and if there's any update, feel free to let us know.
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