Hi there, I encountered this problem and didn’t find the right solution anywhere. Hope this helps you in the future.
Basically I had this error when I was generating ssh key for the remote build.
ERROR: Failed to generate SSH private key for …
You will get this error if your remote ip address has been used before for generating ssh key. For example, I setup and deleted macOS VMs multiple times before. IP for last 2 instances happened to be same but the name was different. So windows thought there was something wrong and didnt proceed with generating ssh key.
Solution: Delete the IP entry for you new mac in C:\Users[Username].ssh\known-hosts