If you look an your agents overview you'll probably see that agent in a yellow state - instrumentation disabled means it won't be capturing PurePaths. Your collector was low on memory so in order to cope with that it began preventing agents from getting instrumentation to avoid running out of memory.
You'll need to resolve the memory issue either by restarting the collector or ideally increasing the amount of heap (if possible) available to the collector process to avoid running low on memory. Once that is resolved the agents/applications need to be restarted so that they can be instrumented.
It is DR (non-prod) one. The server Total RAM is 32 GB with the server set to Medium (32GB).
The Collector runs on 2 GB Heap. And there is like 70-80% Utilization with 2 GB free. Should we TWEAK XMX setting or rather increase the resources?
To add to James' answer:
The settings for the collector heap are located in the configuration file highlighted below, you'll need to navigate to the folder where you installed your collector.
I've included a screenshot of the lines in the configuration file that will need editing. All you need to do is change the number to reflect the amount of memory you would like to assign to the collector - make sure the host has enough memory first though. Once you've done this, restart your collector service and the changes should apply.
ex: If I wanted to change my file to give my collectors 8 GB instead of 6 GB (my current setting), I would change -Xms6G and -Xmx6G to -Xms8G and -Xmx8G.