When installing the openssh-portable (7.1.p1_2,1) the following advice is displayed: [...] Users are encouraged to create single-purpose users with ssh keys, disable Password auth with 'PasswordAuthentication no' and define very narrow sudo privileges instead of using root for automated tasks. which is half-true / misleading. Actually it is necessary to also set: ChallengeResponseAuthentication no otherwise the PAM mechanism will still allow authentication through a password if authentication with a key fails, leaving a host open to password-guessing attacks.
Good catch. I had that in my local setup as well. I've updated the message.
A commit references this bug: Author: bdrewery Date: Wed Nov 11 18:04:41 UTC 2015 New revision: 401289 URL: https://svnweb.freebsd.org/changeset/ports/401289 Log: Update advice to disable ChallengeResponseAuthentication for key usage. PR: 204475 Reported by: Mark.Martinec@ijs.si Changes: head/security/openssh-portable/Makefile head/security/openssh-portable/pkg-message