Dear keee2k,
I have not much experience with MSSQL (more PostgreSQL).
But When choosing the WAS only function you still need to create the magicinfo database in the MSSQL server.
For my understanding MSSQL server, the password id needed to access MSSQL and the Database user password is the user that has access to the specific database in this case magicinfo.
I hope this information will help you.
Kind regards,
Pepijn.