Found the issue. Issue is triggered because of targeted-distribution. Kindly remove it from dynamic-profile and check once.
Feb 16 13:13:48 ==> BEGIN Dynamic Request( "dhcp-local-server-profile"
Feb 16 13:13:48 Info< session=2 action=ADD data_id=0xc141040>
Feb 16 13:13:48 bbe_process_dynamic_request: request to dprof plugin succeeded
Feb 16 13:13:48 dprof_process_request: Received cfg bits 0x00001402 0xf239c0ff
Feb 16 13:13:48 dprof_process_request: Received ADD request for profile: "dhcp-local-server-profile" from plugin: Central, Aux = 0
Feb 16 13:13:48 ERR: dprof_process_request: Add pre_processing failure for client request from plugin: Central, session_id=2, err=110, Invalid targeting config
Feb 16 13:13:48 ERR: dprof_request_handler: Request processing failed for plugin: Central, session_id=2, err=8
Feb 16 13:13:48 bbe_central_dprof_response_handler: response received, dprof response = 0x0xbdb8a18, data id = 0xc141040
Feb 16 13:13:48 bbe_dyn_prof_send_response: NACKing dynamic profile, dprof error: Failed to create IFL
Regards,
Rahul