This is error is based on Diagnostic Server Secondary Connection alarm. The SQL Server Secondary connection Failure alarm is independent from the SQL Server Connection Failure alarm. The Diagnostic Server makes two types of connection for monitoring - primary and secondary. If a primary connection fails the SQL Server Connection Failure alarm is raised then connection itself will fail.
If a secondary connection fails the SQL Server Secondary Connection Failure alarm is raised but the connection remains intact. So monitoring can continue as long as a primary connection is connected even if one or more secondary connections are disconnected. Examples of a secondary connection are the SQL Analysis connection and the Windows Registry connection.