@Jasem thanks for your help and patiently answering my questions. Finally solved the issue by disabling/removing virtualgps device (software) and after that it worked great. Now Indi panel can see CQ 350 mount with SkyWatcher -> EQMount driver. All good now!
--- Additional information, for those interested ---
In my troubleshooting attempts, nothing weird found in the dmesg. Although, there were logs in the syslog (/var/log/syslog) that indicated virtual gps daemon was trying to claim /dev/ttyUSB0 before EQMount driver
I also noticed 'fuser -k /dev/ttyUSB0' once showed the pid of gpsd process, but it killed the daemon after first attempt (OS issue), and after that it didn't show up the pid when running the 'fuser ..' command again. It was miss on my end earlier, as repeated attempts of fuser returned nothing. But it was definitely the other process trying to claim USB serial first, before EQMount daemon.
Removed the virtualgps/gpsd* software, rebooted and everything worked fine after that.