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I was told this feature is working as intended/designed, so I decided to post an idea to see if there was interest in the feature I'm looking for.
In debugging a workflow that another Alteryx user at my company was developing, we realized that an in-db connection was inadvertently pointing to the wrong environment. Because of how in-db tools output messages, there wasn’t anything visual pointing to this as an issue without manually inspecting the connection in “Manage In-DB Connections”. Since I’ve encountered some challenges with In-DB connections before, I suggested using the Dynamic Output In-DB tool, which I’ve used before for the “Input Connection String” option.
What I had never done before, and didn’t realize until I tested this, was use this with a connection that leverages an embedded SQL Server account username/password. When using this type of connection, an error is thrown that says: “ Dynamic Output In-DB (1) To use this tool select an appropriate data source and select the "Allow Decryption of Password" Password Encryption option in Manage In-DB Connections.”. However, the tool still works and appropriately pulls the connection as it exists.
For security reasons, we don’t want decrypted passwords floating around in this information, and we can’t enable “allow decryption of password” in our server environment.
So, my request would be to either add logging to In-Database tools to pass the connection string information (similar to regular input tools), or to add a method for outputting a connection string without a decrypted password that doesn't cause an error in Alteryx.