We are trying to create woocommerce archive with toolset blocks.
We have also installed woocommerce blocks.
But when we are trying to create archive from Toolset -> Dahsboard -> click on create archive for product, Its not creating a a archive instead its just adding two shortcodes
I believe this to be a case where you have the Classic editor plugin installed or your theme or another plugin is enabling the classic editor.
When this happens you won't be able to use the Gutenburg editor to create your archives. What I would recommend is that you disable the classic editor plugin if installed or check in your theme settings to see if it is enabling the classic editor.