Hi Sanjyot,
So there are a couple things here.
1. "set formatted data" is used to put some dynamic html text into the Rich Text object - not to change the format of data. See attached image for an example. There is no built-in way to put the raw seconds into mm:ss format. You would have to do some math manually to do that, but I'm not sure where you would need it in that format - SmartBuilder gives the time in seconds, and will only understand the time in seconds (for example: 189 would be equivalent to 03:09). If you need it in a specific format, we can see about making an easy way to translate it.
2. The actions you have here only set the text when the page loads or changes, so the trigger is wrong, not the format. Also (not shown in the image), the actions are setting the text to the time, and then
immediately overwriting it with the text string "mm:ss". You want to know the
current time, so you have to use the trigger that is updating every second (the one on the timer) - and you do not want to use "set formated text" at all. See attached image.
Hope that helps!