Actually, Datastream is a serverless product, so it isn’t physically in the project B VPC-B.
And because VPC peering isn’t transitive, peering Datastream > VPC-B > -VPC-A > Cloud SQL doesn’t work. To get around this, you’ll need to either:
a) set up an additional reverse proxy in VPC-B to forward the traffic to the AuthProxy in VPC-A (which will then connect to Cloud SQL)
or
b) set up a Shared VPC, peer Datastream to it, and put the reverse-proxy there (and I think in this case you don’t need the additional AuthProxy, just point the proxy at the Cloud SQL database?)
In either case, make sure that Datastream is pointing to the proxy’s IP, not the database’s.
(DISCLAIMER: I’m not a networking expert, so I might be missing something)