@Artem Ervits yes, this has been resolved but I didn't accept my own answer because we never found out what exactly was wrong. The issue merely stopped occurring after we reinstalled HDP on a server with no virtualization - I detail this in my answer. In any case, I've accepted my own answer as a reference, for the benefit of others.Thanks!
@Luis Antonio Torres Listing databases (Sqoop eval) just needs the Namenode access to sql server. Whereas, for import/export (mapreduce tasks) Datanodes also need to have access to the sqlserver. I know your issue is resolved and this is a late reply but someone else might be looking for this in future.