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Karaf bundles a default "karaf.key" for SSH. This is not good security practice, and it doesn't really have any practical use unless the user uncomments the hard-coded key in etc/keys.properties. The latter is not something we should support, if the user wants to use keys.properties, then the user should generate a keypair and put the public key into keys.properties as explained in the manual.
I tested that SSH'ing into Karaf using both a password, and a key defined in keys.properties works correctly with this fix, both for openssh and using bin/client.