This worked for me SLES 15in SLES 15. Referred the error: debug1: Exit status 127debug1: Exit status 127
# grep -i sftp /etc/ssh/sshd_config
Subsystem sftp internal-sftp
Whereas for older version of OS i.e. SLES 12SLES 12, used below
# grep -i sftp /etc/ssh/sshd_config
Subsystem sftp /usr/lib/ssh/sftp-server