However, this is not happening with the competitor theme.
I noticed that the navigation menu on this website middle aligns itself with respect to the logo.
So far, the only workaround I found is to increase the menu item height. But if I do that, the mouse cursor changes to hand even if I bring the mouse anywhere near to the menu item while the menu item is still about 30-40px away.
I have gone through each and every setting but couldn’t find any option to fix this.