I know this is possibly a bit off-topic, but I had this same error
message and the problem turned out to be my server. OpenSSH was set up
correctly, but /dev/null had the wrong permissions (700 instead of 666)
which was stopping SFTP from functioning.

Just thought I'd leave this here in case anyone else is Googling a
similar problem. :)

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"Error: ssh program unexpectedly exited" when trying to browse files on router
https://bugs.launchpad.net/bugs/424648
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