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Quotation Marks in Azure SQL DB vs Managed Instance

Michael Bourgon notices a difference between Azure SQL DB and Managed Instance/box product:

I was trying to get some Xquery parsing working, and ran into a weird error:

"CONDITIONAL failed because the following SET options have incorrect settings: 'QUOTED_IDENTIFIER'"

Weird.  Doubly so because this code has worked on-prem for a decade, and the Managed Instance is running it now.  

Read on for the solution.