vCenter Appliance update fails – “Update failed. Fix and reset banner.”

I recently tried to patch my vCenter 6.7 to latest patch level and it failed with a weird message on the appliance console – “Update failed. Fix and reset banner.”

Tried to update from console using “software-package” tool – same result. I took a look into software-packages.log file in /var/log/vmware/applmgmt folder and noticed a line “You are required to change your password immediately (root enforced)”. Used passwd to change the root password and restarted the upgrade – Success!.