Hi @Vamsi421
1. Just to be sure - is the flash algorithm in Pemicro settings configured to ...ab_swap.arp? It can be found here:

2. Was the swap successful? Did you get HSE_SRV_RSP_OK response when calling service HSE_SRV_ID_ACTIVATE_PASSIVE_BLOCK?
3. What can you see when you just attach the debugger?
https://community.nxp.com/t5/S32-Design-Studio/How-attach-to-running-program/m-p/1030375
If you watch the memory, are the partitions swapped? Or you can also check DCMOTAR bit in DCMSTAT register. See HSE FW RM for details.
If you reset the device by debugger after such attach, is the program counter set to entry point?
4. Is the bin file working when you program it directly to active region?
Regards,
Lukas