A product with Unlisted status is not getting displayed as a recommendation

A product with "Unlisted" status is accessible only by direct link. Shopify intentionally hides them from search, collections, and product recommendations. You can read more about it in this article https://help.shopify.com/en/manual/products/details/product-details-page#unlisted-products

Therefore, when creating recommendations, the app will not add products with "Unlisted" status, since they can't be discovered by customers.