@R, HemanthKumar Thanks for your engagement and sharing your workaround in the community. Since the Microsoft Q&A community has a policy that the question author cannot accept their own answer, they can only accept answers by others, I'll repost your solution in case you'd like to Accept the answer.
Issue: when you try to add an azure function with a http trigger (Python v2 model) it to the logic apps, it does not appear in the actions, but you were able to add another function using the v1 model.
Workaround: when modified function_app.py route argument, with empty string **@app.route(route="") we see the httptrigger (Python v2 model) in the actions.