No, password auth transfers the password and (usually) hands it to PAM on the server to verify - the server sees your password. Key auth happens in SSH and the

No, password auth transfers the password and (usually) hands it to PAM on the server to verify - the server sees your password. Key auth happens in SSH and the private key never leaves your machine. (If I remember correctly just putting SSHd in the highest debug level, which logs every byte received, did work to intercept passwords)