You can't select from a parameter-specified database where the parameter has multiple values. This is because your query only includes a single select statement - you would need multiple selects unioned together, when trying to union the results from multiple databases.
I recommend that you uncheck the option to select multiple values from the database parameter.
If you absolutely have to be able to select from multiple databases specified by a singular parameter then you will need to rewrite your query like so:
select 'DB1' DBName, C1, C2, C3 from DB1.T1 inner join DB1.T2 on T1.C4 = T2.C4
where 'DB1' in (@SelectedDatabase) UNION ALL
select 'DB2' DBName, C1, C2, C3 from DB2.T1 inner join DB2.T2 on T1.C4 = T2.C4
where 'DB2' in (@SelectedDatabase) UNION ALL
...
You would need to hardcode the name of each database to be selected in each SELECT clause, and would need to have a select clause for each of the databases that could possibly be selected.