You can try to add "version" and/or "charset" to your database config.
'sqlsrv' => [
    'driver' => 'sqlsrv',
    'url' => env('DATABASE_URL'),
    'host' => env('DB_HOST', 'localhost'),
    'port' => env('DB_PORT', '1433'),
    'database' => env('DB_DATABASE', 'forge'),
    'username' => env('DB_USERNAME', 'forge'),
    'password' => env('DB_PASSWORD', ''),
    'charset' => 'utf8', // <-- this
    'version' => '8.0', // <-- and this
    'prefix' => '',
    'prefix_indexes' => true,
    // 'encrypt' => env('DB_ENCRYPT', 'yes'),
    // 'trust_server_certificate' => env('DB_TRUST_SERVER_CERTIFICATE', 'false'),
],