Good question, isn't it? ESRI decided that you will not be able to connect to an ArcSDE instance from ArcMap 10.7 onwards. Its a way too old architecture, so it should be revised and deprecated in favour of the same product that is wrapped into a different framework.
ITs a bit of a shame if your corporate architecture has multiple running instances - seems like you will be spending a lot of money to replace this if you want to enable users to connect to the database via this engine.
What is going to be the next ESRI? Deprecating the database connection tools only allowing your fancy cloud datastore or something similar? Or even better - no database conenction should be allowed from ESRI at all!!! Either you connect to a ArcGIS service or buzz off.
Now you have to pay me for this good idea...
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