So, some progress happened.
Strangely, installer completed part1 of process when I created 128gb partiton from MiniTool and left other unalliocated, & then reformatting partition in Disk Utility. But after that when I went to complete the wizard (part-2) on target partiton I got KP.
Repeating the above process , I got the the following screen multiple times.(Only grey screen and mouse)
View attachment 274368
After many tries I got this screen multiple times and the installer just got stuck at this point
View attachment 274370
and once at this point (where it asks me to reinstall macos)
View attachment 274371
Also once I got error that - macos cannot continue installation, unable to unmount volume. So I was unable to complete the part-2 of the process.
Also disk utility gets stuck many times when I try to reformat partition:
View attachment 274374
Still at this point system is very unstable. These are the result which I hardly reach 1 in 5-8 times. Mostly during i get KP or get stuck at apple logo after verbose boot.
I think there might be still problem with nvme drive.