Hi Manyam,
I had a similar business case wherein I have to restrict values based on the selection in the dropdown. I created 2 entities:
Create a form with a data view and a microflow as a source. The microflow will create an empty object for the parameter and will return this object. Once parameter values in your case, multi-select field, call a microflow with parameter values. The second microflow will fetch the data from the base table using the values from the parameter in XPath. The microflow will return the list object of the second entity.
Regards,
Puneet