In GAAP Reclassification, when we re-classify from HFT to AFS, why unrealized Gains/ Losses go to Income Statement and not to OCI?

There is no logical answer to this, it’s just accounting.

One reason could be- if you are running losses, then u may be tempted to reclassify ur investments in AFS category as in AFS unrealised gains/losses go in OCI. in HFT, they go in P/L. By asking u to take gains/losses in P/L standards are ensuring that reclassification is not for earnings management