After a several hours of trial and error, I could finally resolve the issue. Polycom has very poor documentation for asterisk.
Here is how I did it.
On Freepbx I did the following:
I modified the mysql dabase in paging table from
Polycom ALERTINFO Alert-Info: info=Auto Answer
To
Polycom ALERTINFO Alert-Info: info=Ring Answer
Next
in [macro-extension] in extention_additional.conf
I changed from
exten => s,n,ExecIf($["${phone:0:7}" = "Polycom"]?Set(ALERTINFO=Alert-Info: info=Auto Answer))
To
exten => s,n,ExecIf($["${phone:0:7}" = "Polycom"]?Set(ALERTINFO=Alert-Info: info=Ring Answer))
Then just ran a reload from cli.
On Polycom vvx series phones, though the web browser of the extension, I selected utilities ---> Imprt/Export ---> export (All device setting) and saved it to my desktop.
Opend the file in notepad, and added 3 lines:
In the reg directive, I added this line
reg.1.auth.password="xxxxxxxxxxxxxxx" (The password for that extension)
This is because there is comment, that the auth password is not exported. So it is important to include this line or else the phone will not be registered.
In the server directive, after port=5060 I added these 2 lines:
voIpProt.SIP.alertInfo.1.class="4"
voIpProt.SIP.alertInfo.1.value="Ring Answer"
Save the file with the same file name.
Then through the web browser, I selected the Import option (Select file). Wen to my desktop folder where the file was saved and clicked on "Import"
After the Import was successful, I clicked on --->utilities-->"restart phone"
That is all.
I did that for all the extensions.
After the phones restarted, paging and Intercom started working flawlessly.
Cheers!!!!!
P.S. Do Not eb=nable auto answer option in the phone through the web interface. Leave everything as default.