Nice! Thanks for that @Naresh_Bhardwaj !
I would echo what @BlakeRichardson mentioned. If you're using the MX for DHCP, double check your Security & SD-WAN -> Addressing and VLANs page and make sure your subnet VLAN "MX IP" is configured correctly. Because based on that configuration, the client would be getting the IP address directly from the LAN the AP is plugged in to.
Does the Meraki Dashboard report the correct/expected IP address of the client device at Network-Wide -> Clients?
If the dashboard is correct, then I would guess there could be a VPN or proxy setup on the local machine. So while you're getting a local IP, there could be an agent on the machine that is forcing the traffic elsewhere.
As always, with ALL Meraki products that you own and are licensed for... Ping Meraki Support too! They can jump into your dashboard and validate your findings and give you real-time feedback to help you work your way through it!
You can go to Help -> Get Help on your dashboard or view some contact info here: https://meraki.cisco.com/support/!
Hope that helps!