@rounak while I can see why this issue is happening, what are you actually trying to achieve here?
If you want to show the actions panel for the given file, select the file and use the Features > File Search > Actions > File Selection hotkey. This will always show the actions panel for the file you have selected.
If you want to pass the selected file through to a workflow for processing, set the hotkey action to "pass through to workflow".
Essentially, if you were to type that exact file path into Alfred, you'd get the same results you are seeing here in the file system navigation from selecting a path and showing Alfred with that path. If you turn off "Fuzzy Matching" in Alfred's Features > File Search > Navigation, you'd see the exact file you selected in this case.
Cheers,
Andrew