Comment 2 for bug 1437005

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Colin Watson (cjwatson) wrote : Re: Default sshd_config file has bad path to sftp-server. Should be /usr/lib/openssh/sftp-server, not /usr/libexec/openssh/sftp-server

This is peculiar, because I don't believe we've ever written it out with the upstream libexec path. Yes, the examples file shows it as libexec, but we've written out "Subsystem sftp /usr/lib/openssh/sftp-server" for new installations since 2005.

Is it possible that you had hand-edited your sshd_config at some point?