In ESXi version 8.0.2 and earlier, key-based authentication can be enabled on the host by setting the "PasswordAuthentication" parameter to "no" in the /etc/ssh/sshd_config file.
Modifying the /etc/ssh/sshd_config file to change the "PasswordAuthentication" parameter is no longer supported in ESXI version 8.0.2 and above. See KB "Configurable properties of SSH Server on ESXi 8.0.2 or later" for the supported method.
VMware vSphere ESXi 8.0.2 and later.
To achieve equivalent functionality as "PasswordAuthentication" parameter, set the "UsePAM" and "ChallengeResponseAuthentication" parameters to "yes".
esxcli system ssh server config set -k usepam -v yes ;
esxcli system ssh server config set -k challengeresponseauthentication -v yes".