If you have created the On SQL Authentication method but decided against using it you must remove the method completely. To do so click the minus sign in the explorer so that it becomes greyed out.

   
Side by side comparison of the minus sign.

If you only delete the contents of the method it will still be executed when attempting to connect to the database via SQL. If the On SQL Authentication method is executed it must return true before the database will allow the connection. This will obviously not happen because their is no code to execute.