Yes /etc/krb5.conf was the issue in the destination TST cluster. Specifically the [domain_realm] section did not have proper mapping for the replication source prod hosts and the prod realm. Since the PRD and TST hosts were all in the same domain so it was not easy to map the domain and realm using just the .proddomainxyz.com = PRODREALM . Instead we had to specify the individual source prod hosts in the destination TST /etc/krb5.conf file as below:
[domain_realm] prodhostxx1 = PRODREALM prodhostxx2 = PRODREALM prodhostxx3 = PRODREALM etc. specify all the source prod hosts here
If we don't specify the prodhosts like above replication doesn't know how to map the prodhosts to the PRODREALM and picks up the default TSTREALM which is why the original wrong realm error happened. Thanks!