Hi @Nishan Ratna,
The SQL Server Integration Services Projects extension for VS2022 is a preview version with many bugs and limitations. You bumped into one of them.
You need to use Visual Studio 2019 and its SQL Server Integration Services Projects extension to develop SSIS projects targeting 2016 version. It supports the following SSIS run-time versions: 2012, 2014, 2016, 2017, 2017, 2019, 2022.
https://marketplace.visualstudio.com/items?itemName=SSIS.SqlServerIntegrationServicesProjects