Symptoms

Salesforce broker instance created successfully
Smartobjects generated successfully
Creds cached using broker management tooling

When executing the smartobject for any entity in the tester this works 100%.
When I use that SMO to generate a view and try to run that view I get a popup asking for username, password, serverURL. When creds are entered to the popup immediately comes back with a login failed message. However the creds entered to the popup are correct and it doesn't look like it is trying to auth against salesforce. (no comms traffic)

 

Diagnoses

The error is expected since user does not have Salesforce token append to the password when Service Instance is configure using SSO Authentication mode.
 

Resolution

Updating Salesforce Service Instance to use Static Authentication allow users to be able to execute smartobject without prompting for user credentials.