I’m guessing you want to run
gawk 'BEGIN{RS="DEBUG"; FS="\
"} /123/{print $0"\
"}' ./app_108_utf8_T2.log > output.txt
`BEGIN` defines the block of instructions which run at the start of the process, and `/123/` defines the block which runs when the “123” regular expression matches the current line. You can’t specify both for a single block.