Hi
I am having the same problem.
I have SQL server 2016 web, I have MSSQL service enabled, I created an SQL security login user and gave it a password and sysadmin rights, then confirgured the service settings in SolidCP to use SQL and then entered the username and password for that login, but I still get the same error as above. I originally checked the Error log in SQL Management to see that the Trusted connection was getting a user not recognised error, hence why I created the new login. The log is now showing no, but I am still getting the error above.
Once I can get the service to connect, will the space name prefix start to show for the database name, or is that another thing on my list to work out?