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I imagine that your connection name does not exist on your server. So it doesn't really know what to do with it when it gets it. Rather than create the connection can you just have the raw connection string in there and see if that works?
On this note, you should check out the gallery connection feature of Alteryx Server. It's SUPER NICE when managing connection names as they are created and managed from the server and the ability to access these named connections is granted by that admin. The ability to see this connection in the designer is the only permissions really granted, you still need access to that data source for it to work.