when applying inner stroke from layer style panel if you reduce stroke opacity it instead of revealing the layer its on as it becomes transparent it actually hides the layer. What can i do to not hide they layer just blend with when i reduce the opacity of stroke.
You can't do anything. Reducing the opacity of Layer Style strokes simply works as you've described. There's no way to alter the behavior of an inner stroke with reduced opacity.
To solve the issue, consider using a duplicate layer with the fill opacity set to 0, then apply a layer style inner stroke and reduce it's opacity on the duplicate layer.