What is the reason the public holidays are not included in the leave?

The reason is, that the public holidays are not assigned yet in the leave arrangement.

To include them:

Go to Employer / HRM / Holidays

Select all the public holidays and choose for "assign".

Choose the tim-off policies for which you want to make the holidays available. Normally, you select all of the policies.

Click on:

Now you noticed that the days are assigned to the policies of your choice