I'm saying that 90% of these setups look like this (or do the equivalent thing manually):

   ssh -o StrictHostKeyChecking=no -o UserKnownHostsFile=/dev/null root@192.168...

Exactly. But 'passive encryption' isn't helpful; if you can see the traffic, you can MITM it. Just RST the connection, wait for the reconnect, intercept.

Well, sure. You can turn off host key checking in ssh! But that isn't responsive to a point that (1) host key validation exists in ssh and (2) host key validation is on by default in ssh.