Hi SharmilShah,
Thanks for posting back and providing the detailed information.
Regarding "the dataset also populates all columns irrespective of the form", I can reproduce the same situation. By design, the default value of a column is that it will auto-populate when a new list item is created even if it doesn't show up in the form. I'm afraid you can't change this behavior directly.
In this case, based on my searches and testing, I didn't find an easy or out-of-box way that can fully meet your needs. If you still want to use different list forms to collect responses and want to set different default value for the dataset column in different forms, I recommend you create multiple sub-lists to collect and store data and then use Power Automate to sync/copy the values to a master list.
For example, you create a sub-list for Sales. In the sub-list, you can create a dataset column, set its default value to "Sales", and then create a list form to collect responses from users. In this way, you can create a Marketing list and a Finance list, and then create the corresponding list forms. Then, you need to create the relevant Power Automate flow to automatically sync/copy the list item to the master list when it is created in the sub-lists.
In the meantime, we welcome community members to share ideas about the situation if one has related experiences.
Thanks for your understanding.
George | Microsoft Community Moderator