@Thiruneelakandan (KYNDRYL), Thanks for posting in Q&A.
For your question, please check the following.
1.Check whether the policy is applied to device.
2.Check your System Requirements.
Here are some common issues that frequently asked and some methods enabling Microsoft defender application guard you can refer.
https://www.thewindowsclub.com/enable-or-disable-microsoft-defender-application-guard-for-office
Non-official, just for reference.
Hope it will help.
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