diff --git a/src/Microsoft.Data.SqlClient/src/Microsoft/Data/SqlClient/Connection/SqlConnectionInternal.cs b/src/Microsoft.Data.SqlClient/src/Microsoft/Data/SqlClient/Connection/SqlConnectionInternal.cs
index cf0a296b30..ef563fcccd 100644
--- a/src/Microsoft.Data.SqlClient/src/Microsoft/Data/SqlClient/Connection/SqlConnectionInternal.cs
+++ b/src/Microsoft.Data.SqlClient/src/Microsoft/Data/SqlClient/Connection/SqlConnectionInternal.cs
@@ -3662,7 +3662,15 @@ private void LoginWithFailover(
                         continue;
                     }
 
-                    if (IsDoNotRetryConnectError(sqlex) || timeout.IsExpired)
+                    // If state != closed, indicates that the parser encountered an error while
+                    // processing the login response (e.g. an explicit error token). Transient
+                    // network errors that impact connectivity will result in parser state being
+                    // closed. Only network-level errors should trigger failover alternation;
+                    // login-phase errors (like transient errors) should be thrown so they can
+                    // be handled by the outer ConnectRetryCount loop.
+                    if (_parser?.State is not TdsParserState.Closed ||
+                        IsDoNotRetryConnectError(sqlex) ||
+                        timeout.IsExpired)
                     {
                         // No more time to try again.
                         // Caller will call LoginFailure()