The current behavior is a bit disappointing. Unfortunately, this functionality works only with Classic Compute. When I select Serverless, no databases are displayed at all.

Additionally, there is another major performance concern. In my environment, I have around 10 databases, each containing 1,000+ tables. The system attempts to fetch the complete list across all databases, which takes more than 10 minutes. This experience is far from ideal, waiting that long every single time just to add a new table is not acceptable.

The Databricks team should seriously consider improving the performance and user experience in this area.