SSRS Execution Account cannot be used with Report Builder

Running SQL Server 2012 SP2, I have specified an Execution Account in Reporting Services Configuration Manager as described here: http://msdn.microsoft.com/en-us/library/ms156302(v=sql.110).aspx
The article states: "You can specify Integrated Security=SSPI if the database server supports Windows integrated security and the account used for unattended report processing has permission to read the database." I have created a data source using
the Report Manager Web interface with connection string: "Data Source=<server>;Initial Catalog=<database>;Integrated Security=SSPI" and "Connect using: Credentials are not required" option.
The Execution Account is a domain user account with db_owner membership on the database in question. When I "Test Connection" in Report Manager, the connection is created successfully.
However, when I attempt to create a new dataset using this data source in Report Builder, I am unable to connect to the data source: "You have specified integrated security or credentials in the connection string for the data source, but the data source
is configured to use a different credential type. To use the values in the connection string, you must configure the unattended report processing account for the report server."
If I change the "connect using" option for the data source to "Windows integrated security" I can successfully create a new dataset and report in Report Builder. After saving the report, I reconfigure the data source for "Credentials
are not required" and I am able to successfully run the report using the Execution Account.
Is this a known limitation? The Report Builder cannot be used with an unattended Execution Account configured?

Hi desmondgc,
According to your description, you have set the execution account for connecting data source. You can connect data source successfully, but can't create dataset with the unattended account. Right?
As we tested in our local environment, we encountered the same issue. Even testing connection successfully in Report Builder, it still says unable connect to data source when creating dataset.
For this issue, I would recommend to submit it to the Microsoft Connect at this link
https://connect.microsoft.com/SQLServer/Feedback.
This connect site will serve as a connecting point between you and Microsoft, and ultimately the large community for you and Microsoft to interact with. Your feedback enables Microsoft to offer the best software and deliver superior services, meanwhile you
can learn more about and contribute to the exciting projects on Microsoft Connect.
We will keep you updated if we find something, thank you for your posting.
Best Regards,
Simon Hou

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