Hello @Gurinder Summan ,
@John Funk and @Marc -Devoteam- have identified the core of it: the two projects behave differently by design. Your Project 1 uses the classic Service Management template, where the Organizations concept auto-associates the reporter's organization. Your Project 2 uses the Customer Service Management (CSM) template, which handles organizations through a different model entirely, so the classic auto-populate behaviour is not there to configure, exactly as Marc says.
Since you asked for a direction, here is the actual decision in front of you:
Option 1: stay on CSM and use its organization model. In CSM, organizations are profile entities, each with its own profile page and detail fields, and the customer's organization membership provides context on requests rather than writing the classic Organizations field. The practical payoff: those organization detail fields work in JQL, so you can build queues, SLAs, reports and automation keyed to the organization without the field ever being set on the work item. If your goal is "agents and queues should know which organization a request belongs to," CSM can meet it, just through profiles and JQL rather than a field value. The customer and organization management docs cover the pieces: https://support.atlassian.com/jira-service-management-cloud/docs/manage-your-customers-and-organizations/
Option 2: if the classic Organizations field behaviour is a hard requirement, for example existing reports or automation keyed to that specific field, then the honest answer is to run that workstream on a classic Service Management project, like your Project 1, since that is where the behaviour lives. Your own site proves this works today.
One reassurance if you ever consolidate: Atlassian's migration documentation confirms that existing customer and organization profiles carry over automatically when moving between Jira Service Management and Customer Service Management, so choosing one direction now does not strand your organization data: https://support.atlassian.com/customer-service-management/docs/move-from-jira-service-management-to-customer-service-management/
The deciding question is simple: do you need the organization as a field value on the work item, or as context your team can see and query? If it is the second, stay with CSM and build your queues on organization details. If it is the first, the classic template is the right home for that project.
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