diff --git a/src/Microsoft.SqlTools.ServiceLayer/ObjectManagement/ObjectTypes/Database/DatabaseHandler.cs b/src/Microsoft.SqlTools.ServiceLayer/ObjectManagement/ObjectTypes/Database/DatabaseHandler.cs
index c99ebc55..85a8d1f2 100644
--- a/src/Microsoft.SqlTools.ServiceLayer/ObjectManagement/ObjectTypes/Database/DatabaseHandler.cs
+++ b/src/Microsoft.SqlTools.ServiceLayer/ObjectManagement/ObjectTypes/Database/DatabaseHandler.cs
@@ -401,8 +401,7 @@ namespace Microsoft.SqlTools.ServiceLayer.ObjectManagement
                         prototype.Name = database.Name;
 
                         // Update database file names now that we have a database name
-                        // Modifying logical file name is not supported in SQL Database Managed Instance.
-                        if (!prototype.HideFileSettings && dataContainer.Server.DatabaseEngineEdition != DatabaseEngineEdition.SqlManagedInstance)
+                        if (viewParams.IsNewObject && !prototype.HideFileSettings)
                         {
                             var sanitizedName = DatabaseUtils.SanitizeDatabaseFileName(prototype.Name);