There was typo in my workflow line. It worked when I corrected it. But a quick question! We have the customized Status list for Test Instances/TestCases, Test Steps have still the System defined status list. When I run the testcase and if I update the Test step with status that is not there in the status list for Test Case, TestStep status is overwriting the TestCase status. For example Testcase has completed, pass, fail and TestStep has pass, fail and blocked as statuses. If I update the test step as blocked, at the end of the execution the test case status also updated to Blocked. How can we overcome this?

The status of Blocked in ALM means that there is a problem that has prevented a step in the test from being run. Below are the only definitions/explanations that I could find for this status. The item you mark as Blocked can not be tested because a previous step failed, or there is a defect that must be fixed before you can perform the test. "Blocked" usually means that your test is blocked by other defect/change which is not related to your testing point. E.g. You want to test login functionality of an application. But the user name field is missing in UI. The behavior blocks your testing but not fail your testing point. I was able to find a document on the Micro Focus Knowledge Base that shows the "Run status list logic.docx". If the status of any step of a run is set to blocked then the status of the Run is set to Blocked to show that thought the test did not fail it was not run completely due some sort of defect or blocking factor. I do not know how you would change this behavior. If you would like to remove Blocked status as you have in the Test Lab you would have to do so in the Manual Runner script -> Step_MoveTo