So I have this code that is able to print All database names from my Azure SQL Edge docker instance.
On port 1433 there one docker container is running
I am entering the
same credentials on Azure Data Studio but I got this error
see this details how I entered for connection



I tried to replicate your issue in my environment with below details:
I got below error:
I changed the encryption details to False from True.
It connected successfully without any error.