The server-side hostbased authentication logic strips any trailing dot from the hostname supplied in the authentication request, which makes sense because no one will enter hostnames with trailing dots in their known-hosts lists.

The option HostbasedUsesNameFromPacketOnly has sshd skip checking the reverse-lookup name of the client IP address against the client-supplied hostname.  However, the current code also skips removing the trailing dot, the result of which is that hostbased authentication fails completely, unless you go and add dots to all your hostnames in the known-hosts file.

I am including a patch to fix this behavior.