Misleading error message with failed SMTP auth

Binary package hint: kmail

If the wrong password is used when connecting to an SMTP sever, kmail displays a misleading error message.

The transport is configured with Encryption=None and Authentication Method=PLAIN. Ethereal shows the transaction as follows (trimmed and munged):

250-PIPELINING
250-8BITMIME
250-SIZE 15728640
250 AUTH LOGIN PLAIN
AUTH PLAIN xxxx
535 authentication failed (#5.7.1)

Kmail then displays the message:

Sending failed:
Your SMTP server does not support PLAIN.
Choose a different authentication method.
The server responded: "authentication failed (#5.7.1)"
The message will stay in the 'outbox' folder until you either fix the problem (e.g. a broken address) or remove the message from the 'outbox' folder.
The following transport protocol was used:

The problem is not that the server doesn't support PLAIN. Just entering the correct password resolves the problem.