Hi @Vishnu Anand,
New and existing guests scope sharing will require people who have received invitations to sign in with their work or school account (if their organization uses Microsoft 365) or a Microsoft account, or to provide a code to verify their identity. Users can share with guests already in your organization's directory, and they can send invitations to people who will be added to the directory if they sign in.
If you share with a person who isn't in the directory(i.e., Gmail.com, Yahoo.com, etc.), they're sent a one-time code that they can use to verify their identity. See Secure external sharing in SharePoint
Depending on the security it turns out to be a by-design one. We are unable to disable code verification. As a workaround, you could set the sharing scope to anyone
This setting will allow users to share files and folders by using links that let anyone who has the link access the files or folders without authenticating.
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