Hi Nidhi,
Based on the screenshots, I conclude that you're configuring a Personally Owned Work Profile for your Android devices.
With the release of Android 12, there were some changes to the Password Quality settings. Which is also depicted in your second screenshot where you have settings for Android 11 and earlier where you have more granular control over the password settings. And you have password settings for Android 12 and later, where you can choose between High, Medium, Low or None.
Because you set the Quality to none, Intune doesn't change or update this setting and the 8-character requirement is from the device itself. To meet your requirement, you would need to change the Password Complexity setting from the second screenshot to High instead of None.
More detailed information can be found here: [https://learn.microsoft.com/en-us/mem/intune/configuration/device-restrictions-android-enterprise-personal#android-12-and-later
Regards,
Ruud