Hi Aruna,
From my experience attempting to use the TOC feature in surveys where all or most items are required, I believe that is how the feature was designed; that is, the survey would only catch the mandatory questions that were skipped once the respondent attempted to move out of the part of the survey within the TOC.
To be honest, I had to abandon use of the TOC feature in my projects because it interfered with the functionality of other features, like Back buttons, EOS options, and response summaries. It seemed like a promising and useful feature when my organization had to move to Qualtrics, but in practice, I found out the hard way that it created more problems than it solved and even some within Qualtrics admitted that it was a feature that was not prominent on the product roadmap. My takeaway is that the TOC might be OK to use by itself, but be careful when using other navigation-related features at the same time.