/etc/ssh/sshd_config Controls these actions and has a line: AuthorizedKeysFile %h/.ssh/authorized\_keys2
If not present in /var/lib/nxserver/home/.ssh/ (ie mine was authorized_keys not authorized_keys2) then link one with the right name to it ie ln -s ~.sshauthorized\_keys2 ~.sshauthorized\_key
I found a reference stating that authorized_key and authorized_key2 were historically different files denoting where public keys were stored respectively for SSH Protocol 1 and SSH Protocol 2. With Protocol 1 having some vulnerabilities, this seems to be more of a legacy issue. As an aside, I tried it and then swapped it out for x2go… so far it’s been a good choice given my technical requirements and lean financial constraints. Community version of FreeNX limits to 2 TS connections at once :(. Reasonable on their side but I needed more.