@Mrudhula Raya Thanks for reaching out to Microsoft Q&A, apologize for any inconvenience caused on this.
To test this behavior, I have created a consumption-based logic enabled managed identity(assigned contributor role at resource group level) and thereby calling above create or update front door policies Rest API in HTTP action (using above shared JSON body), able to create and update the existing Front Door WAF policy without any issues.
Could you please re-try the operation, if you are facing the issue help us with the complete error message, failure run id, logic app name and also which actions, triggers that you are using in your workflow to check and assist you further.