Background Total knee arthroplasty (TKA) is the most commonly performed and highly successful surgical intervention for end-stage osteoarthritis of the knee, and it offers patients pain relief, functional recovery, and improved quality of life. The success of knee arthroplasty depends on various factors such as precise surgical technique, alignment of the limb and components, patient selection, and compliance with rehabilitation. Mechanical alignment of the lower limb has been considered an important factor in planning and assessing the success of TKA. Optimal alignment remains a matter of controversy; hence, it is paramount to assess the alignment and functional outcomes. Aim and objective This study aimed to evaluate the reliability of conventional instrumentation in imparting the intended femoral and tibial coronal alignment, as well as study the functional outcome among the neutrally aligned outliers with respect to the mechanical axis of the lower limb using standing long-leg radiographs. Methodology This is a prospective, hospital-based, observational study that was conducted on 60 knees in 42 patients with primary osteoarthritis of the knee joint in the department of orthopedics, Satguru Partap Singh (SPS) Hospitals, Ludhiana. Patients undergoing total knee arthroplasty who fulfilled the inclusion criteria were included in our study and evaluated using Knee Society Score and knee flexion range at periodic follow-up till six months. Preoperative and postoperative standing long-leg radiographs were done for all the patients, and their functional outcome was compared among inliers and outliers. Results Out of these 60 total knee arthroplasties, 18 patients were operated on both knees, and 24 patients were operated on a single knee. There were 25 female patients and 17 male patients. The mean for pre-operative mechanical axis alignment angle was 11.88° ± 5.63° with a range from -3° to 27°, which changed to 2.90° ± 1.59° with a range from 0° to 8° at six months follow-up. It was observed that 42 of the knees were in the inliers, and the remaining 18 knees were in the outliers group. On comparison among inliers and outliers, we found that the mean range of motion was 108.29° ± 4.82° for the inliers group and 106.11° ± 4.04° for the outliers group (p = 0.091), depicting non-significant statistical comparison. Mean Knee Society Score values in inliers and outliers group were 152.45 ± 5.33 and 151.61 ± 3.55, respectively (p = 0.740), showing no statistical significance. Conclusion At six months follow-up, there is no difference in the knee range of motion and Knee Society Scores between mechanical axis inliers and outliers. Thus, we conclude that although every knee arthroplasty is intended to have neutral mechanical alignment, there is no effect of mild mechanical axis malalignment on functional outcome following total knee arthroplasty in the short term.