I looked at this link to understand: https://oxt.me/transaction/596802d0b3f99149b6c7b4250ce52894938d252aa3ad4fdbf125336bb0c80553

Looks like Electrum consolidated my UTXO and created one UTXO and sent that UTXO to a change address. There is manual way to do this is in electrum which I need to learn or else electrum does that for you due to privacy concerns.

Also the privacy address is part of the same public key.

I looked up the xpub key online and it shows the correct balance of bitcoins. The cold-card wallet setup is brand new and the wallet was exported as JSON from cold-card. Seed was written on paper only not uploaded online anywhere.

Also the second receiving address is part of the x pub key so the wallet did it

I received deposits on my electrum wallet which was in watch only mode.  Looks like the electrum wallet created a new address and send my coins there.

However its unclear how do I spend now given those funds were transferred to another address for privacy.Can someone guide?