diff --git a/tests/tools/test_ssh_bulk_upload.py b/tests/tools/test_ssh_bulk_upload.py
index 97cb39f53cb8..cbdb65434952 100644
--- a/tests/tools/test_ssh_bulk_upload.py
+++ b/tests/tools/test_ssh_bulk_upload.py
@@ -166,10 +166,12 @@ def capture_popen(cmd, **kwargs):
         assert "-" in tar_cmd  # stdout
         assert "-C" in tar_cmd
 
-        # ssh: extract from stdin at /
+        # ssh: extract from stdin at /, preserving existing dir modes (#17767)
         ssh_str = " ".join(ssh_cmd)
         assert "ssh" in ssh_str
-        assert "tar xf - -C /" in ssh_str
+        assert "tar xf -" in ssh_str
+        assert "--no-overwrite-dir" in ssh_str
+        assert "-C /" in ssh_str
         assert "testuser@example.com" in ssh_str
 
     def test_mkdir_failure_raises(self, mock_env, tmp_path):
diff --git a/tools/environments/ssh.py b/tools/environments/ssh.py
index f2f27659c5fb..53d03adce8da 100644
--- a/tools/environments/ssh.py
+++ b/tools/environments/ssh.py
@@ -182,7 +182,11 @@ def _ssh_bulk_upload(self, files: list[tuple[str, str]]) -> None:
 
             tar_cmd = ["tar", "-chf", "-", "-C", staging, "."]
             ssh_cmd = self._build_ssh_command()
-            ssh_cmd.append("tar xf - -C /")
+            # --no-overwrite-dir prevents tar from overwriting the mode of
+            # existing directories (e.g. /home/<user>) with the staging
+            # directory's mode.  Without this, a umask 002 produces 0775
+            # dirs which breaks sshd StrictModes (refuses authorized_keys).
+            ssh_cmd.append("tar xf - --no-overwrite-dir -C /")
 
             tar_proc = subprocess.Popen(
                 tar_cmd, stdout=subprocess.PIPE, stderr=subprocess.PIPE