Maybe this is helpful:
https://learn.microsoft.com/en-us/azure/backup/backup-sql-server-database-azure-vms#establish-network-connectivity
You have to make sure the connectivity between VM with SQL Server, Azure Backup, Azure Storage and Azure AD is working properly.
The required extension will be installed automatically by Azure Backup after the discovery is done:
Azure Backup installs the AzureBackupWindowsWorkload extension on the VM. No agent is installed on a SQL database.
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Regards
Andreas Baumgarten