The reason the connection is unsuccessful is the '@' character in the username is getting interpreted by the inband destination selection feature of SPS. When this happens the username is getting stripped from the domain part and the UPN suffix is interpreted as inband target.
For instance using email@example.com username, the username for the connection will be 'test' and the inband destination is 'ema.il'.
To avoid this behavior Inband destination selection must be used. By specifying the target host explicitly one can prevent SPS to misinterpret the '@' character from UPN usernames.
In the examples below the UPN user name is "test.ema.il", SPS host name is vboxscb5 and inband target is 126.96.36.199.
Inband destination selection setup on SPS SSH Control -> Connections page:
Example 1) Using the above SSH Connection with OpenSSH client:
Example 2) Using the above SSH Connection with Putty SSH client:
Example 3) Using the above connection with WinSCP client: