Each resource type in Azure has a naming scope within which the resource name must be unique. For PaaS resources such as Azure SQL Server (server for Azure SQL DB) and Azure Data Factory, the name must be globally unique within the resource type. This means that you can’t have two data factories with the same name, but you can have a data factory and a SQL server with the same name. Virtual machine names must be unique within the resource group. Azure Storage accounts must be globally unique. Azure SQL Databases should be unique within the server.
Since Azure allows you to create a data factory and a SQL server with the same resource name, you may think this is fine. But you may want to avoid this, especially if you plan on using system-defined managed identities or using Azure PowerShell/CLI. And if you aren’t planning on using these things, you might want to reconsider.
Click through for a demonstration of how you might get into trouble with this.