This is expected behavior by design. SDDC Manager cannot be registered as an SFTP server for SDDC and NSX Backups without updating the Backup user password to match with Encryption Passphrase constraints.
Configure backup with internal SFTP through API, following the below steps -
1. Login to the SDDC Manager
2. Navigate to the Developer Center > API Explorer
3. Under BackupRestore, use PUT /v1/system/backup-configuration
4. Use the input file backupConfigurationSpec and provide all details, for example -
Input:
{
"encryption":{
"passphrase":"password_of_backup_user"
},
"backupLocations":[
{
"server":"SDDC_IP",
"port":xx,
"protocol":"Protocol_Used",
"username":"backup",
"password":"password_of_backup_user",
"directoryPath":"/nfs/vmware/vcf/nfs-mount/backup",
"sshFingerprint":"ssh_fingerprint_of_sddc_server"
}
]
}