Host key verification is a client feature and is on by default. Have you really never gotten the giant warning after a reinstall? That's what that is. SSH is telling you that the server has changed and isn't what you think.
Well, sure. You can turn off host key checking in ssh! But that isn't responsive to a point that (1) host key validation exists in ssh and (2) host key validation is on by default in ssh.
Exactly. But 'passive encryption' isn't helpful; if you can see the traffic, you can MITM it. Just RST the connection, wait for the reconnect, intercept.