Any update on this issue? I am trying to 'refresh' my lower UAT and QA environments via an export/import of the production database (Kentico 12sp). I was able to do this ~4 months ago without issue, now when I follow the exact same steps I see the error above.
When I go to the CMS desk, it thinks I don't have a database and tries to walk me through the creating a new DB instance (/cmsinstall/install.aspx), but doesn't let me 'uncheck' the 'Create Kentico database objects' checkbox...it's disabled.
When I change the password by 1 character I too get the Login failed message.
I tried changing the conn string from my db_reader/writer user to the Azure SQL admin user, and still same problem.
Lastly, I triple checked my SQL Login and User records and passwords and even ran the AzureSQLConnectivityCheckerResults script recommended by the Azure SQL troubleshooter dialog.
When I restore the backup to my local dev machine, I'm able to connect fine.
I can't figure out if this is an Azure SQL issue, or a Kentico issue...