As per your discussion with CSS team the issue is causing because the security configuration where the public endpoint is disabled on both the Azure SQL Managed Instance and the Storage account.
To restore a database to Azure SQL Managed Instance (MI) from a Storage Account with the public endpoint disabled, you must ensure private connectivity between the Managed Instance and the Storage Account. The error you encountered (Operating system error 5 (Access is denied.)
) is typically due to network access or identity issues.
You can follow below document to create a VNet link between zone blobstorage and VNET sql mi and a A record.
https://learn.microsoft.com/en-us/azure/dns/private-dns-getstarted-portal#link-the-virtual-network