Bug#1077554:

I've since learned this bug is upstream; and have most of a fix.
Basically I'm bogged down in autoconf; which makes it unsuitable for
upstream but I could provide a debian specific patch without autoconf.

I don't think the openssh team likes gmail much; the mailing list for
reporting anything upstream doesn't want to let me join or send
anything.

I've thought about it, and constructing a chroot directory per user is
a rather big ask on server support; it really does seem like allowing
ChrootDirectory %h to work with a writable home directory is better
than any alternative. It's actually less effort to patch locally but a
local rebuild in the middle of the night is a pill.