The Connect to Database dialog appears when DGN file opened or a DGN file is referenced that contains a (non-graphic) MicroStation startup database element.
To disable the Connect to Database dialog, set the following variable: MS_GEOXFM_DISALLOW_INFERRED_DBCONNECTION = 1
Note: When in the Connect to Database dialog the Cancel button is selected and/or there is no successful database connection, elements that have database linkages cannot be modified or (fence) copied. The tooltip says Required startup database connection was cancelled, element with RDMBS properties not valid for tool. This error also appears when there is not startup database element
The presence of (non-graphic) MicroStation database element can be viewed in the Verify Linkages dialog (Drawing > Attach > Database > Verify ..). Select the Check For Database Element tool.
Delete the database element by connecting to a database and followed by the key in db= . Make sure you include a space after the equal sign. Next, do a Save Settings. The database element will be removed from the file.