Thanks for your feedback.

Sorry for taking so long to reply back, I didn't test the dev build you sent but I did just update to the latest stable version of WinSCP (5.17.2) and the issue with SCP fallback appears to be resolved. Thanks for implementing the fix so quickly!

Thanks for the logs and all the reports.

This issue has been added to the tracker:
https://winscp.net/tracker/1827

I'm sending you an email with a development version of WinSCP to the address you have used to register on this forum.

We have the same issue. Chaging the shell to "/bin/bash" works, but has to be done for every single connection. Our logs are attached.

Can you post a log file of a failing connection from 5.17 and the same working connection from an older version?

Just changing the shell to /bin/bash in WinSCP resolved for me while still using SFTP. Don't usually save connections but guess I'll have to start, thanks!

I'm getting the same error message with SFTP with "Allow SCP fallback" enabled.
The exact same configuration works fine with version 5.15.9.

Edit: Changing the Shell from "Default" to "/bin/bash" fixes it.
Alternately, manually choosing SCP as the File protocol works as well.

I just updated to 5.17 and when connecting to our gateways, we get the error message "Error skipping startup message. Your shell is probably incompatible with the application (BASH is recommended.)" This is normally where I would have to go in and change the shell to bash, but I have confirmed the shell is set to bash. I grabbed the 10.15 portable and am able to connect to these same servers via bash without issue. Protocol is SFTP, port 22. Screen capture attached. Remote gateways are running on a 2.6 kernel. Not pressed for a fix since I can use an older portable but wanted to let you know.