I have installed Backrest on unraid using docker compose and trying to add my windows PC (W11) as a SFTP Restic Repository.
I have enabled OpenSSH using powershell and these commands:

Add-WindowsCapability -Online -Name OpenSSH.Server~~~~0.0.1.0
Start-Service sshd
Set-Service sshd -StartupType Automatic

And added a new windows user.
In Backrest on my UnRAID server I add sftp://[email protected]/B:/restic/unraid and my password, but getting

[unknown] command "/bin/restic cat config -o sftp.args=-oBatchMode=yes" failed: exit status 1
Output:
subprocess ssh: Host key verification failed.
Fatal: unable to open repository at sftp://[email protected]/B:/restic/unraid: unable to start the sftp session, error: error receiving version packet from server: server unexpectedly closed connection: unexpected EOF

If I try connecting with CLI I get:
root@UnRAID:~# sftp [email protected] The authenticity of host '10.0.21.3 (10.0.21.3)' can't be established. ED25519 key fingerprint is: SHA256:mDIDj0xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxM0 This key is not known by any other names. Are you sure you want to continue connecting (yes/no/[fingerprint])? yes Warning: Permanently added '10.0.21.3' (ED25519) to the list of known hosts. ** WARNING: connection is not using a post-quantum key exchange algorithm. ** This session may be vulnerable to "store now, decrypt later" attacks. ** The server may need to be upgraded. See https://openssh.com/pq.html [email protected]'s password: hostfile_replace_entries: link /root/.ssh/known_hosts to /root/.ssh/known_hosts.old: Operation not permitted update_known_hosts: hostfile_replace_entries failed for /root/.ssh/known_hosts: Operation not permitted Connected to 10.0.21.3. sftp>

Any tips on what to try? Is this the right way?
I prefer using user/password insted of keys