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Sure... should not be a problem. That type of config can also be helpful if you are planning to migrate servers into the cloud. You can have an ''on-prem'' library used to back up the on-prem data, and dash copy to the cloud and using a cloud based MA restore directly to a cloud based client using the library ...
It appears that the debug key is not set correctly. This key needs to either be set on the ''physical'' server where the agent is installed, or it can also be set on the HANA Pseudo-client.
Here is a screen shot where I set this key on a physical server in our lab:
Also note that the ''Key'' is ClHanaAgent_DEBUGLEVEL Please can ...