After some analysis the issues turned out to be related to missing
ed25519 host key. Once it was created the sshd had no issues with
running.
My custom sshd_config has only specific HostKeys defined and for some
reason not having there ed25519 cause this crash.

Running:
ssh-keygen -A

and adding to /etc/ssh/sshd_config line:
HostKey /etc/ssh/ssh_host_ed25519_key

solved this.


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