I presume you’re talking about the always-allow-password-login option (set by default to no) for the second method (use key-pair).
Ok, let’s assume that a key has been added to the user and that option is set to no (I’ve never touched it, it’s still set to no). Then how would you explain this debug log, taken on one of my computers with the ssh client? I haven’t provided the valid key intentionally to see if it works like is should and yet, the SSH service asks for the password not once, but whole three times. Well, why would it ask for a password, if that method (combined with the above option, set to no) is suppose to be disabled?
If you really don’t understand what I’m trying to tell you, check here for reference (4. Disabling Authentication by password).
So, what am I experiencing - a feature or a bug?