Thank you for getting back
As an original poster cannot accept their own answer, I am reposting it so that you can accept it an answer. Accepted answer will help other community members navigate to the appropriate solutions.
Issue: Azure Traffic Manager status was showing as Degraded
Solution: Your app gateway was blocking the traffic manager dynamic IP, as an alternate you allowed azure traffic manager user agent header in WAF policy to access the endpoint
Please don’t forget to close the thread by clicking "Accept the answer" wherever the information helps you, as this can be beneficial to other community members.
Your contribution is greatly appreciated.