ntp server reachable but never select/set the time

We have some embedded devices using ntpd(4.2.8p10) to sync the time. One of our customers is using their own ntp server inside an internal network. From the ntpd -dgq debug mode, we found the server is reachable and we can get the offset, delay and jitter info. However, the ntpd will only exit with"**ntpd: no servers found**" and never select and set the local time.

2 Nov 11:57:05 ntpd: ntpd 4.2.8p10@1.3728-o Thu Jul 26 19:52:20 UTC 2018 (2): Starting
2 Nov 11:57:05 ntpd: Command line: ntpd -dgq
2 Nov 11:57:05 ntpd: proto: precision = 2.000 usec (-19)
Finished Parsing!!
restrict: op 1 addr 0.0.0.0 mask 0.0.0.0 mflags 00000000 flags 000005f0
restrict: op 1 addr 127.0.0.1 mask 255.255.255.255 mflags 00000000 flags 00000000
restrict source template mflags 4000 flags 1c0
restrict: op 1 addr (null) mask (null) mflags 00004000 flags 000001c0
move_fd: estimated max descriptors: 1024, initial socket boundary: 16
2 Nov 11:57:05 ntpd: Listen and drop on 0 v4wildcard 0.0.0.0:123
2 Nov 11:57:05 ntpd: Listen normally on 1 lo 127.0.0.1:123
restrict: op 1 addr 127.0.0.1 mask 255.255.255.255 mflags 00003000 flags 00000001
2 Nov 11:57:05 ntpd: Listen normally on 2 eth1 192.168.168.109:123
restrict: op 1 addr 192.168.168.109 mask 255.255.255.255 mflags 00003000 flags 00000001
2 Nov 11:57:05 ntpd: Listen normally on 3 wlan0 192.168.100.1:123
restrict: op 1 addr 192.168.100.1 mask 255.255.255.255 mflags 00003000 flags 00000001
2 Nov 11:57:05 ntpd: Listening on routing socket on fd #27 for interface updates
key_expire: at 0 associd 60163
peer_clear: at 0 next 1 associd 60163 refid INIT
restrict: op 1 addr 10.160.129.161 mask 255.255.255.255 mflags 00004000 flags 000001c0
restrict_source: 10.160.129.161 host restriction added
event at 0 10.160.129.161 8011 81 mobilize assoc 60163
newpeer: 192.168.168.109->10.160.129.161 mode 3 vers 4 poll 6 10 flags 0x101 0x1 ttl 0 key 00000000
event at 0 0.0.0.0 c016 06 restart
peer_xmit: at 1 192.168.168.109->10.160.129.161 mode 3 len 48 xmt 0xe52bde52.ddf3c87c
auth_agekeys: at 1 keys 0 expired 0
event at 1 10.160.129.161 8014 84 reachable
clock_filter: n 1 off 30.082946 del 0.048598 dsp 7.945314 jit 0.000002
peer_xmit: at 3 192.168.168.109->10.160.129.161 mode 3 len 48 xmt 0xe52bde54.ddf0a416
clock_filter: n 2 off 30.083616 del 0.047583 dsp 3.949228 jit 0.000670
peer_xmit: at 5 192.168.168.109->10.160.129.161 mode 3 len 48 xmt 0xe52bde56.dde968ab
clock_filter: n 3 off 30.078398 del 0.054469 dsp 1.951189 jit 0.004895
peer_xmit: at 7 192.168.168.109->10.160.129.161 mode 3 len 48 xmt 0xe52bde58.dde80026
clock_filter: n 4 off 30.079499 del 0.074539 dsp 0.952172 jit 0.003164
peer_xmit: at 9 192.168.168.109->10.160.129.161 mode 3 len 48 xmt 0xe52bde5a.ddea03c8
clock_filter: n 5 off 30.083616 del 0.044472 dsp 0.452664 jit 0.003340
2 Nov 11:57:16 ntpd: ntpd: no servers found
END OF FILE

Also, when running ntpd in the background and using **ntpq -p** to query the ntpd status. We get the following result, the st, delay, offset and reach seem fine.

root@S8P20092901:~# ntpq -c as

ind assid status  conf reach auth condition  last_event cnt
===========================================================
  1 59609  9014   yes   yes  none    reject   reachable  1

root@S8P20092901:~# ntpq -np
     remote           refid      st t when poll reach   delay    offset  jitter
==============================================================================
 10.160.129.161  162.159.200.123  4 u  24   64   377    40.404    -180.122   20.122

However, the ntpd never select the ntp server as the time source(never show "*" or "+" before the remote address ) or sets the local time after a long time of waiting.
I looked into the source code. When using ntpdate(-q) mode the ntpd will exit after doing all bursts for every server when there is no clock selected/ set

} else {
		peer->burst--;
		if (peer->burst == 0) {

			/*
			 * If ntpdate mode and the clock has not been
			 * set and all peers have completed the burst,
			 * we declare a successful failure.
			 */
			if (mode_ntpdate) {
				peer_ntpdate--;
				if (peer_ntpdate == 0) {
					msyslog(LOG_NOTICE,
					    "ntpd: no servers found");
					if (!msyslog_term)
						printf(
						    "ntpd: no servers found\n");
					exit (0);
				}
			}
		}
	}

However, I am still not understand why ntpd didn't select and set a time form the server. Thanks for your help in advance.