A customer reported an issue today he encountered while trying to configure the TFS 2012 Scheduled Backups Wizard. During the validation checks he hit this error:
Permissions at the server scope can only be granted when the current database is master
This is a bug in the Scheduled Backups wizard in TFS 2012 (QU2 and QU3). The workaround is to set the default database for the running user's SQL Login to be 'master'.
I'll get this fixed in the next version, but in the meantime you can workaround this issue by setting the default database back to 'master' by running this SQL query on the server(s) hosting the TFS databases. Make sure to change the domain\username value to the account that is running the wizard.
ALTER LOGIN [domain\username]
WITH DEFAULT_DATABASE = [master]