@Nilabh Prashar Thanks for reaching out. This is by design. All query parameters marked as "required" are converted to template parameters during import. Template parameters are also query parameters, since they're passed in the Url. Since they are marked as required, we convert them as template parameters so that API calls that do not include these parameters will fail with a 404.
there is an option of manually changing this via form-based editor if you prefer a different behavior,
or you can simply remove the "required" attribute from the open API definition in which case APIM will not convert them to template parameters.
do let me know incase of further queries, I would be happy to assist you.