@Shradha nair - just to be clear, I no longer work at Outsystems, so I have no real pull to get this done. I like your idea, and that is a beautiful UI design you created, but I still struggle to see it fitting into the existing Service Studio visual Entity action interface.
For example, look at the system entity, User, and the Entity Action UpdateUser.

The input parameter for the Update action is the entity record. You fill the entity record's attributes with values, either existing or new, and Outsystems writes the full UPDATE script behind the scenes - sometimes using a partial statement if you have set the Update Behavior on the Entity as Changed Attributes, or a full UPDATE if the behavior is all attributes.
So behind the scenes on a "Changed Entity" it compares the values to see if they have changed, and only scripts a partial UPDATE to address those changed attributes. But it still requires a full copy of the record with all attributes.
Still brainstorming. The properties of an entity attribute are stored in the Entity_Attr system entity. There you can see the Name, Description, Type, Length, etc., that make up the definition of the individual attributes of an entity. To create a standard Entity action, the input would be, not an entity record, but a List of your chosen Attributes, plus their updated value.
In ODC, for example, the additional Entity action UpdateSome accepts a list of Entity records.
In your ODC code, you do whatever you need to do to build the list of records you want to update.
In this case, in O11, you would need to, in code, do something like you so beautifully illustrated to select which attributes to add to the list for the input parameter of attributes to be updated, plus the value of each attribute. The tricky bit is enforcing the data type of each attribute when you are assigning variables as values.
Oh well - food for thought. This will probably keep me awake at night for a bit.