3249519 - 401 Unauthorized error returned from backend abap system when using basic authentication via Cloud Connector

When connecting to backend abap system from BTP via a cloud connector, although basic authentication is specified on cloud application and the user credential is correctly entered, the backend abap system still returns '401 Unauthorized' error.

The following response can be found in the traffic trace 'traffic_trace_<account id>_on_<landscapehost>.trc'/'tunnel_traffic_<account id>_on_<landscapehost>.trc' (if 'Payload Trace' is activated on cloud connector as per KBA 2452568)
 
>>> yyyy-mm-dd hh:mm:ss,xxx +xxxx  >>> Response data for connection 0xxxxxxxxx in thread tunnel-client-xx-x
000000 | XXXXXXXXXXXX  |HTTP/1.1 401 Unauthorized..set-c|
000020 | XXXXXXXXXXXX  |ookie: sap-ssolist=XXXXXXXXXXX|

Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental. 

SAP Cloud Connector

cloud connector, 401, unauthorized, traffic trace, system mapping, basic authentication, principal type, X.509 Certificate, strict usage, sap-ssolist, system certificate for logon , KBA , BC-MID-SCC , SAP Cloud Connector On-Demand/On-Premise Connectivity , Problem