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Can any one help on how to set the SharePoint online site List/Library to read only using Power-Shell script?

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There's no setting as such but you can give the List or Library unique permissions and set all groups/users to have only Read permissions to the list.

Here is an article that describes how to do this using PowerShell:

https://www.sharepointdiary.com/2017/09/make-sharepoint-list-library-read-only-using-powershell.html

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You can use Set-PnPListPermission to remove and add users/groups permissions.

Two blogs for your reference:

SharePoint Online: Remove User or Group from List Permissions using PowerShell

SharePoint Online: Grant Permission to List or Library using PowerShell

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