This issue may not be limited to just my case, but a job running a simple .NET C# console app which is connecting to SQL is not using the assigned MSA account setup for it, but instead VC is trying to use a made-up MSA account by using the actual server name where VC is installed. The SQL connection is using Integrated Security so no credentials are used in the connection string. If a switch to a regular account (with login and password) instead of the MSA in VC, it is impersonating and working as it should. This started happening after latest Microsoft Security Patch for Windows Server 2016. It worked fine before. It looks to me that something broke (or requires changes on VC side) to make this work again.
While this is being looked at, I switched away from MSA for the moment.