OpenSSH_6.7p1 hostbased authentication failing on linux->linux connection. what's wrong with my config?

[Iain Morgan]

To begin with, don't complicate the situation by requiring two forms of
authentication before you've gotten a single form of authentication
working. In addition, root is too much of a special case for useful
debugging; try your tests as a regular user.

As Tim Rice noted, you will need to set EnableSSHKeysign in the
system--wide client configuration for hostbased authentication to work
for non-root users.

-- 
Iain Morgan