@SRQ CiviCRM Thank you for contacting us and I apologize for the delayed response!
The logs suggest a connection related problem. Have you tried looking at the NSG if you have access to the required endpoints?
First thing, check if the VM where you are performing restore has connectivity to the Target address on 3260. You could check if you are able to access - Discovering Targets from Portal: pod01-rec2.eus.backup.windowsazure.com,3260 from the VM from which you are restoring?
You could use this detailed TSG guide for file recovery scenario - Troubleshoot Azure VM file recovery - Azure Backup | Microsoft Learn
Also there are other pre-requisites readiness checks - https://learn.microsoft.com/en-us/azure/backup/backup-azure-restore-files-from-vm#for-linux
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