I've tried multiple valid db connection strings that I've tested locally. I have existing connections that are working, but when I try to set up the same one with the same credentials, it fails again with the above error.
I have the same error with the "Test Connection" button but I can still create new connections and after creating the connection, the "Test Connection" button works. So, the problem is specifically with "Test Connection" on the create resource screen.
@APD what happens if you try to create the connection without using "Test Connection"?