Minimum credentials on SQL Server to connect via Power BI Desktop
I made a test SQL user, created the test user in a Test database I created, and granted it datareader access using scripts, and this worked without an issue.  Switch out the usernames and database names for your app and report in on what happens when you start fresh.  It could be as simple as you're using a old user that is orphaned to other issues so starting fresh could help you isolate it.

Note if you are using this for production you'll want to probably remove the 'check_policy=off' which lets you have passwords that don't conform to your Windows policy.

This creates the user in SQL Server:

USE [master]
GO
CREATE LOGIN [test] WITH PASSWORD=N'test', DEFAULT_DATABASE=[master], CHECK_EXPIRATION=OFF, CHECK_POLICY=OFF
GO


This creates it in the DB and adds it to the datareader list:

USE [test]
GO
CREATE USER [test] FOR LOGIN [test]
GO
USE [test]
GO
ALTER ROLE [db_datareader] ADD MEMBER [test]
GO