In the ticket you have opened related to this issue you have noted that you have the appropriate SQL version installed on your machine. What I can suggest is that you check the account you are using to connect to your SQL server and make sure that this account has create database permissions. Please refer to the important clause from the following article
from our documentation.
In addition to this, can you please make sure that you enter properly the username and the password of the SQL user when configuring the database on the Set Database
step? Please also make sure that you properly set the SQL server in the Server
What I can also suggest is that you try to check the Windows Authentication
(please refer to the attached screenshot) and let me know about the results?
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