Hi Subha,
For the Composable Dashboard, the Content Blocks don't get any indication that content is not rendered into the extension frame therefore they cannot self-collapse.
https://tecton.q2developer.com/guides/composable-dashboard/
Currently, the composable dashboard design guidlines request all content blocks have an empty or completed state.
If there is no relevant, timely information; the content block should incorporate an appropriate "empty state".
I believe the current controls for hiding and showing Composable Dashboard content blocks are controlled with user rights or with rules set up in the Experience Builder admin tool for Composable Dashboard.