I finally had time to go through all the necessary straddling on server and client side.
Note, not about this version, but about month newer version. Just updating this post because my previous statement was in this tread for context.
I updated with the “years end” version of Duplicati and tested the SFTP with it, and now it works. Interestingly still with aftp, there’s the problem that it asks for capabilities before login. But when I switched from AFTP to FTPS and set the encryption mode using CLI parameter, now it works as expected. All good, great! - Just confirmed my earlier expectations, that it requires probably extra effort to go through all the necessary options and find out fully working combination.
Just noting that the TLSv1.3 is not supported, but that’s currently acceptable.