Thanks for finding the commit Paride. I ported it to Focal in a PPA
here: https://launchpad.net/~lvoytek/+archive/ubuntu/openssh-fix-
passwordauthentication-config

After testing I can confirm this worked for me, if you would like to
test it though you can run the following commands:

sudo add-apt-repository ppa:lvoytek/openssh-fix-passwordauthentication-config
sudo apt update
sudo apt upgrade

I'll assign this bug to myself and work to get it added to 20.04

** Changed in: openssh (Ubuntu Focal)
     Assignee: (unassigned) => Lena Voytek (lvoytek)

** Changed in: openssh (Ubuntu Focal)
       Status: Triaged => In Progress

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https://bugs.launchpad.net/bugs/2012298

Title:
  PasswordAuthenticaion in sshd_config.d

Status in portable OpenSSH:
  Unknown
Status in openssh package in Ubuntu:
  Fix Released
Status in openssh source package in Focal:
  In Progress

Bug description:
  The stanza
  Match User <username>
        PasswordAuthentication no

  in /etc/ssh/sshd_config works as expected.

  The same stanza in /etc/ssh/sshd_config.d/username.conf does not work.

  The Include in /etc/ssh/sshd_config is not commented out, and

  /usr/sbin/sshd -D -ddd

  shows the username.config file being parsed.

  ProblemType: Bug
  DistroRelease: Ubuntu 20.04
  Package: openssh-server 1:8.2p1-4ubuntu0.5
  ProcVersionSignature: Ubuntu 5.4.0-131.147-generic 5.4.210
  Uname: Linux 5.4.0-131-generic x86_64
  NonfreeKernelModules: falcon_lsm_serviceable falcon_nf_netcontain falcon_kal 
falcon_lsm_pinned_14713
  ApportVersion: 2.20.11-0ubuntu27.25
  Architecture: amd64
  CasperMD5CheckResult: skip
  Date: Mon Mar 20 13:34:14 2023
  InstallationDate: Installed on 2022-11-04 (136 days ago)
  InstallationMedia:
   
  SSHDConfig: Error: command ['pkexec', '/usr/sbin/sshd', '-T'] failed with 
exit code 127: pkexec must be setuid root
  SourcePackage: openssh
  UpgradeStatus: No upgrade log present (probably fresh install)

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