Unable to modify the SSH Server properties by doing direct edits in the "/etc/ssh/sshd_config" file after installing or upgrading to ESX 8.0.2 or later.
VMware vSphere ESX 8.0 U2
Starting with 8.0.2, a user can modify a subset of SSH Server configuration using "esxcli commands"; hence, direct modification to the /etc/ssh/sshd_config file is no longer supported.
esxcli system ssh server config list
esxcli system ssh server config set -k <key/property name> -v <value>
It appears there is no API call available to edit the value for ESX server config “Password Authentication” using PowerCLI.