Hello Anuj Singhal,
We really appreciate your patience, Looks like Looks like a bug in the portal UI. I have tried with the CLI command az apim product | Microsoft Learn and the update was successful.
Here is the command I tried "az apim product update --resource-group <Resource Group Name> --service-name <APIM Service Name> --product-id Starter --approval-required true ", and it got worked.
After using the above please Inspect the portal and look for the settings under the Starter product. It should reflect the setting for Required Approval checked (as shown in below image).
Finally, this could be a platform bug, and we will bring this to the product team's attention.