Thanks for reporting this issue.
This dialog is actually from openssh, and requiring the user to type
"yes" or "no" in the window is deliberate in order to make the user read
what he's agreeing to.
If you don't agree with openssh's dialog box, please file a new bug
against the openssh package.
** Changed in: virt-manager (Ubuntu)
Status: Confirmed => Won't Fix
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SSH dialog for first remote connection to unknown server should not be a
password field
https://bugs.launchpad.net/bugs/220825
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