The redirection issue solved by updating authorization policy
apiVersion: security.istio.io/v1beta1
kind: AuthorizationPolicy
metadata:
name: example-auth-policy
namespace: istio-system
spec:
action: CUSTOM
provider:
name: "oauth2-proxy"
rules:
- to:
- operation:
paths: ["/app"]
notPaths: ["/oauth2/*"]
selector:
matchLabels:
app: istio-ingressgateway
- Added
istio-system
namespace instead of workload namespace (it was default in my case) - Forgot to add
matchLabels
.