If two or more SDE connection files are active in an ArcMap or ArcCatalog session, the connection file that contains saved user name/password or version information is used, even if the other SDE connection file does not contain saved user name/password or version information.
ArcCatalog saves connection information in a binary connection file called an SDE connection file (*.sde). Connection files can be created through the Add Spatial Database Connection tool in ArcCatalog. When creating a connection file, it is the user's choice to save both the user name/password and version information with the connection file. If these properties are not saved, the connection file is referred to as a partial connection file.
When a partial connection file is used to establish a database connection, ArcGIS prompts the user to enter the missing properties. However, if there is an existing connection to the same ArcSDE geodatabase in the ArcMap or ArcCatalog instance, any subsequent partial connection matching the original server, instance, and authentication mode properties, uses the original connection properties. If the user connects to an ArcSDE geodatabase with a partial connection file, such as missing user name/password or version, and there is already a connection to the same server and instance, the user is not prompted to fill in the missing properties; the properties from the original connection are used instead.