I was able to find the solution after a lot analysis. This is a Shibboleth configuration issue. In the application defaults section, the entity ID should be unique to the application.
ApplicationDefaults signing="false" entityID="http://URL of the protected Application " REMOTE_USER="eppn persistent-id targeted-id"
Another variation of this error happens when sigining is set to true. It will result in Signature mismatch error in ADFS.