Which secure boot mode did you configured? There's sequential mode, parallel mode or strict sequential mode.
If sequential or parallel boot mode fails, the only consequence is that boot protected keys cannot be used. That's the only effect, it does not affect your application, it's still executed.
If strict sequential boot mode fails, the device stays in reset forever and there's no way to recover.
ANS: Using the S32K144_CSEc_Secure_boot_add_boot_MAC_Manual example from AN5401sw, we configured serial secure boot with boot mode 1 in the BOOT_DEFINE() function. if boot mode 1 corresponds to strict sequential boot mode, this would explain the permanent reset behavior we're experiencing."
/* Step-3 Define the secure boot flavor and the BOOT_SIZE*/
csec_error = BOOT_DEFINE(128*1024*8, 1);
"
Did you check the reset signal? Is it released after power-on?
ANS: Yes, I have checked the reset signal. The reset signal remains active (reset LED stays on) after power-on, indicating the device is still in resetting state
Also once CSEc is enabled, mass erase (Erase All Blocks command) is locked:

To enable mass erase, it is necessary to erase all keys by CMD_DBG_CHAL and CMD_DBG_AUTH commands with knowledge of MASTER_ECU_KEY.
ANS: When attempting to flash AN5401_S32K144_CSEc_Resetting_Flash_to_Factory_State, I receive "Device is secure. Erase to unsecure?" dialog. Even after clicking "Yes", the same dialog keeps appearing repeatedly
S32DS has "Emergency Kinetis Device Recovery by Full Chip Erase" option. Should we use this to recover the device?

Note:
We don't have the debugger setup for flashing and erasing. We are using S32DS for flashing and debugging. Hence need assistance on mass erase.