Is it possible to have logical separation of Azure APIM service i.e one could work like Prod and Non-Prod at the same time?
If you check this Azure API Management DevOps Resource you would find that Microsoft recommends to use separate Azure API Management service instances for various environments, such as production, development, and QA. Where these environments are generally shared by multiple development teams, each responsible for a subset of APIs. It is the best practice for the enterprise setup.
But if you don't want to create multiple instances then, you could try using versions and revisions.
You can create revisions by right clicking API and click "Add Revision".
Similarly you can create versions by right clicking API and click "Add Version".
For more information check this answer by @DSpirit on the similar problem shared in Stack Overflow.