While I have not configured VIDM against a Clustered SQL instance lately I have done several stand-alone and AlwaysOn configurations. Based on my limited knowledge of SQL I don't believe the SQL Connection string should be any differen't.
Does it matter which physical instance is active to get that error?
I've attempted the install while having the clustered instance on either nodes and same result. I am attempting the initial db connection setup after deploying the appliance, after supplying the passwords.