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The recommended method to restrict user access to each database in Azure primarily involves using the REST API. The REST API provides programmatic access to manage Azure resources, including the ability to configure security settings and manage user permissions at a detailed level. With the REST API, you can execute requests to define roles and assign users specific permissions for each database effectively. This allows for a more fine-grained control over access management.

While Azure PowerShell, Transact-SQL, and Azure CLI are valuable tools that can also be used to manage Azure resources and databases, they typically operate as interfaces for executing commands and scripts. Transact-SQL, for example, is primarily used for database-level operations directly within SQL Server and Azure SQL Database but does not inherently provide the same level of API-based granularity or extensibility for managing user access across multiple databases as the REST API does.

Using the REST API is often the most versatile and scalable approach, especially in automated environments where programmatic access and control are necessary. It allows for integration with other services and applications which can simplify the management of user authentication and authorization across your Azure environment.