Battery wasn't charging but Mac shows it was charging whole night.

Batteries are considered Consumable Products. Over time it will degrade to a point where it needs to be replaced. The usage is normal as the capacity will go up and down all the time and never stay always at 100%. Apple Batteries are rated for 1000 Full Battery Cycles and / or 80% Capacity before needing Evaluation or replacement.

For additional reading on Battery and Apple Computers this link may help. About battery health management in Mac notebooks and especially for the M1 and Big Sur  & Monterey If battery charging is paused or on hold on your Mac

Depending on the Age of the computer, some aspects from the above links, may or may not apply to your computer.

A feature introduced into Big Sur & Monterey was to preserve the number of Full Battery Cycles - there was an Algorithm coded into the macOS. It is perfectly Normal for Big Sur , Monterey to Pause / Suspend charging the battery beyond 80% and hold it at that level. One can nudge / over-ride this by clicking the Battery Icon on Desktop Top Bar and allow charging beyond 80%. From observations, it will Pause / Suspend again once reading 90%. Same procedure to over-ride and will charge to 100%

And as per your picture the Optimize Battery charging is Enabled. Read ti fine print circled in you pictured

MUzairS wrote:

You mentioned, we can override to charge till 100% forcefully. but i never saw any option like charging is paused when battery is at 80 or 90, click to charge to 100.

Optimize battery is on, since purchase of device.

To answer that specific question - Re-read the entire reply earlier wherein " One can nudge / over-ride this by clicking the Battery Icon on Desktop Top Bar and allow charging beyond 80%. From observations, it will Pause / Suspend again once reading 90%. Same procedure to over-ride and will charge to 100% "

As long as the charger is attached to computer and giving the computer power - it will be running on Electrical.

Though, to keep the battery from charging to 100% the code in the OS is not allowing it to charge to 100%

I suggest you Use Apple Diagnostics to test your Mac, and see if it detects a battery problem. Click on the link inside the link about reference codes. They say what they mean.