I have the below setup
Mikrotik AP/Router -------wifi--------- Lantronix xPico 270 _____ETH____ PC

mikrotik AP hax2 running routerOS 7.13 standard configuration. the Lantronix xPico 270 is configured as a wifi client and its bridging its ethernet and wifi client interfaces. a embedded PC is connected via ethernet to the Lantronix ethernet port.

the issue i am facing is that Mikrotik router/AP is not answering DHCP Discover requests from the PC, these get forwarded by the Lantronix using its own MAC address but the Client mac address is correctly set to that of the PC in the DHCP discover request that is sent. i have verified this by doing pcap on the mikrotik router. the lantronix xpico 270 correctly gets an ip. and the PC eventually gets a link local address as well which i am able to ping with as well.
attached is the pcap capture showing the different DHCP pkts

if i replace the mikrotik ap with a iphone hotspot the embedded PC correctly gets a DHCP IP from the iphone.

is there a specific setting that needs to be changed on the mikrotik to allow DHCP requests from the ETH side of the lantronix to be served as well.

There is no such thing as "cross-vendor standard wireless bridging" which would be required for wifi bridge to act as a transparent connection between two wired "islands" (similar to UTP cable between two switches). Read more about it in this article. It's about use case where station is Mikrotik and AP is 3rd party, but you can mentally reverse the situation ...

I guess that in your scenario, the Lantronix WiFi station does something similar to "station-pseudobridge".