OTAG 1.2.1, OTDS 10.5 and CS10.5 settings to access CS10 demo app

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Hello
I have installed AWG 1.2.1 along with CS10.5 & OTDS 10.5 on server.

As per AWG Installation guide it is mentioned that if you are using Internal Authentication and not OTDS then only you have to create below entry into Server.xml

Initially I was not able to login and create trusted url using "otadmin@otds.admin" account, hence I have added above entry into Server.xml and it works and I was able to access using otadmin@otds.admin account and created Trusted URL for CS10.5

But, now I have downloaded and trying to access CS10 demo app (from Developer site) but its giving me Unathorized user error for all the account which are added via OTDS into CS10.5

Same with Rest API (only account giving me response is Admin account for CS10.5 in case of REST API test)

Please guide me if any changes requierd for this to work, as I cannot start with my actual application unless this settings has been properly established.

Thanks,
Aditi