Jovan Popvic shows how you can take a copy-only backup of a TDE-protected database in Azure SQL Managed Instance:
We are recommending to rely on automatic backups only, with the build-in restore functionality to restore a database from a point-in-time, restore a database to another instance (for instance from production to dev)or Geo-restore functionalities to move your database. These automatic backups can be kept up to 35 days. These built-in automatic backups are secure and enables you to be fully compliant. In this scenario COPY_ONLY backups are only in some specific cases.
Strict TDE protection don’t allow you to take your own custom backups. If you need a backup of a TDE protected database, you would need to temporary disable TDE, take a backup, and then enable TDE again.
It’s not really a Managed Instance-specific thing, but rather TDE: if you want to take a non-encrypted backup of an encrypted database, you’ve got to kill encryption first.