Hi @Uday Kasula ,
It is recommended to look at the CPU performance available in the Performance section in the Application insights of the function app. This gives accurate information about the CPU and memory utilization.
Since the actual metrics show above 20% and due to the fact that the autoscale rule is set at CPU>10, you are seeing an increase in the number of instances. It is possible that the CPU utilization might be fluctuating between a value greater than scale in value and greater than scale out value. For example 8 and 13, so the instance is getting added continuously. So I would suggest you increase the scale in and scale out condition value.
Hope this helps!