Sidecar proxy is not added

I am trying to install multicluster istio mesh using manifests from istio repo. I changed default.yaml file from istio release.
I create the manifests using:

istioctl manifest generate --manifests ./manifests

The istioOperator:

apiVersion: install.istio.io/v1alpha1
kind: IstioOperator
metadata:
  namespace: istio-system
spec:
  hub: gcr.io/istio-testing
  tag: latest

  # You may override parts of meshconfig by uncommenting the following lines.
  meshConfig:
    defaultConfig:
      proxyMetadata: {}
    enablePrometheusMerge: true
    # Opt-out of global http2 upgrades.
    # Destination rule is used to opt-in.
    # h2_upgrade_policy: DO_NOT_UPGRADE

  # Traffic management feature
  components:
    base:
      enabled: true
    pilot:
      enabled: true

    # Istio Gateway feature
    ingressGateways:
    - name: istio-ingressgateway
      enabled: true
    egressGateways:
    - name: istio-egressgateway
      enabled: false

    # Istio CNI feature
    cni:
      enabled: false
    
    # istiod remote configuration wwhen istiod isn't installed on the cluster
    istiodRemote:
      enabled: false

  # Global values passed through to helm global.yaml.
  # Please keep this in sync with manifests/charts/global.yaml
  values:
    global:
      meshID: mesh1
      multiCluster:
        clusterName: cluster1
      network: network1
      istioNamespace: istio-system
      istiod:
        enableAnalysis: false
      logging:
        level: "default:info"
      logAsJson: false
      pilotCertProvider: istiod
      jwtPolicy: third-party-jwt
      proxy:
        image: proxyv2
        clusterDomain: "cluster.local"
        resources:
          requests:
            cpu: 100m
            memory: 128Mi
          limits:
            cpu: 2000m
            memory: 1024Mi
        logLevel: warning
        componentLogLevel: "misc:error"
        privileged: false
        enableCoreDump: false
        statusPort: 15020
        readinessInitialDelaySeconds: 1
        readinessPeriodSeconds: 2
        readinessFailureThreshold: 30
        includeIPRanges: "*"
        excludeIPRanges: ""
        excludeOutboundPorts: ""
        excludeInboundPorts: ""
        autoInject: enabled
        tracer: "zipkin"
      proxy_init:
        image: proxyv2
        resources:
          limits:
            cpu: 2000m
            memory: 1024Mi
          requests:
            cpu: 10m
            memory: 10Mi
      # Specify image pull policy if default behavior isn't desired.
      # Default behavior: latest images will be Always else IfNotPresent.
      imagePullPolicy: ""
      operatorManageWebhooks: false
      tracer:
        lightstep: {}
        zipkin: {}
        datadog: {}
        stackdriver: {}
      imagePullSecrets: []
      arch:
        amd64: 2
        s390x: 2
        ppc64le: 2
      oneNamespace: false
      defaultNodeSelector: {}
      configValidation: true
      meshExpansion:
        enabled: false
        useILB: false
      omitSidecarInjectorConfigMap: false
      defaultResources:
        requests:
          cpu: 10m
      defaultPodDisruptionBudget:
        enabled: true
      priorityClassName: ""
      useMCP: false
      sds:
        token:
          aud: istio-ca
      sts:
        servicePort: 0
      meshNetworks: {}
      mountMtlsCerts: false
    base:
      enableCRDTemplates: false
      validationURL: ""
    pilot:
      autoscaleEnabled: true
      autoscaleMin: 1
      autoscaleMax: 5
      replicaCount: 1
      image: pilot
      traceSampling: 1.0
      env: {}
      cpu:
        targetAverageUtilization: 80
      nodeSelector: {}
      keepaliveMaxServerConnectionAge: 30m
      enableProtocolSniffingForOutbound: true
      enableProtocolSniffingForInbound: true
      deploymentLabels:
      configMap: true

    telemetry:
      enabled: true
      v2:
        enabled: true
        metadataExchange:
          wasmEnabled: false
        prometheus:
          wasmEnabled: false
          enabled: true
        stackdriver:
          enabled: false
          logging: false
          monitoring: false
          topology: false
          configOverride: {}

    istiodRemote:
      injectionURL: ""
      
    gateways:
      istio-egressgateway:
        zvpn: {}
        env: {}
        autoscaleEnabled: true
        type: ClusterIP
        name: istio-egressgateway
        secretVolumes:
          - name: egressgateway-certs
            secretName: istio-egressgateway-certs
            mountPath: /etc/istio/egressgateway-certs
          - name: egressgateway-ca-certs
            secretName: istio-egressgateway-ca-certs
            mountPath: /etc/istio/egressgateway-ca-certs

      istio-ingressgateway:
        autoscaleEnabled: true
        type: LoadBalancer
        name: istio-ingressgateway
        zvpn: {}
        env: {}
        secretVolumes:
          - name: ingressgateway-certs
            secretName: istio-ingressgateway-certs
            mountPath: /etc/istio/ingressgateway-certs
          - name: ingressgateway-ca-certs
            secretName: istio-ingressgateway-ca-certs
            mountPath: /etc/istio/ingressgateway-ca-certs
kubectl apply -f {generated manifest}
kubectl label ns sample istio-injection=enabled
kubectl apply -f samples/sleep/sleep.yaml

No sidecar is created and the istiod pod has following log:

2021-01-11T16:06:33.983044Z	info	Sidecar injection request for sample/httpbin-66cdbdb6c5-***** (actual name not yet known)
2021-01-11T16:06:34.015160Z	info	Sidecar injection request for sample/httpbin-66cdbdb6c5-***** (actual name not yet known)
2021-01-11T16:06:34.778156Z	info	ads	Push debounce stable[30] 1: 100.160784ms since last change, 100.16061ms since last push, full=false
2021-01-11T16:06:34.778226Z	info	ads	XDS: Incremental Pushing:2021-01-11T16:06:33Z/20 ConnectedEndpoints:2
2021-01-11T16:06:34.977133Z	info	ads	Incremental push, service sleep.sample.svc.cluster.local has no endpoints
2021-01-11T16:06:35.077306Z	info	ads	Push debounce stable[31] 2: 100.114592ms since last change, 110.809711ms since last push, full=true
2021-01-11T16:06:35.078442Z	info	ads	XDS: Pushing:2021-01-11T16:06:35Z/21 Services:18 ConnectedEndpoints:2
2021-01-11T16:06:35.078676Z	info	ads	CDS: PUSH for node:istio-ingressgateway-7665678695-2x54p.istio-system resources:1
2021-01-11T16:06:35.078688Z	info	ads	CDS: PUSH for node:istio-ingressgateway-7665678695-dwnzq.istio-system resources:1
2021-01-11T16:06:35.078721Z	info	ads	LDS: PUSH for node:istio-ingressgateway-7665678695-2x54p.istio-system resources:0
2021-01-11T16:06:35.078728Z	info	ads	LDS: PUSH for node:istio-ingressgateway-7665678695-dwnzq.istio-system resources:0
2021-01-11T16:06:35.771862Z	info	Sidecar injection request for sample/sleep-8f795f47d-***** (actual name not yet known)
$ kubectl version --short
Client Version: v1.20.0
$ istioctl version --remote
client version: 1.8.0
control plane version: 1.8.0
data plane version: 1.8.0 (2 proxies)

I am using EKS cluster.

kubectl get po -n sample
NAME                       READY   STATUS    RESTARTS   AGE
httpbin-66cdbdb6c5-94dpr   1/1     Running   0          7m24s
httpbin-66cdbdb6c5-p8f6q   1/1     Running   0          11s
sleep-8f795f47d-526hb      1/1     Running   0          26m