I was able to reproduce this on Alpine 3.23.7 with OpenSSH_10.2p1.

Luckily PermitRootLogin [0] hasn't allowed logins with passwords for root since 2015 [1]. I'm guessing that's at least part of why this went undiscovered for so long.

0: https://man.openbsd.org/sshd_config#PermitRootLogin

1: https://cvsweb.openbsd.org/diff/src/usr.bin/ssh/sshd_config?...