Hi Maheswaran,
What you're seeing is expected behavior rather than a replication or GPO issue. The groups under CN=Builtin (such as Administrators, Backup Operators, and Server Operators) are Builtin domain-local administrative groups intended primarily for administrative delegation within the domain, particularly on Domain Controllers. They are not designed to function as general-purpose resource groups across member servers. As a result, Domain Controllers can resolve these groups because they host the security database where these Builtin principals are meaningful, whereas the object picker on member servers does not consistently enumerate or resolve them for ACL assignment. This differs from groups like Domain Admins or Domain Users, which are standard Active Directory groups stored in the Users container and are expected to resolve from any domain-joined system.
For assigning NTFS, share, or application permissions, Microsoft's recommended practice is to create your own Global/Universal and Domain Local security groups (following AGDLP or AGUDLP) rather than relying on the Builtin groups. This provides predictable behavior, clearer delegation, and aligns with modern Active Directory design.