Thanks for taking the time to report this bug. I'll attempt to reproduce it.
In the meantime, since you are connecting to root@server, have you made sure that you can ssh to root@server? In the past when I've done that, after creating an ssh key and inserting it into root@server's keyring, I had to log in once by hand to get past ssh's server key fingerprint verification.
Thanks for taking the time to report this bug. I'll attempt to reproduce it.
In the meantime, since you are connecting to root@server, have you made sure that you can ssh to root@server? In the past when I've done that, after creating an ssh key and inserting it into root@server's keyring, I had to log in once by hand to get past ssh's server key fingerprint verification.