luksFormat without root results in "Not compatible PBKDF options"

When trying without root:

    $ dd if=/dev/zero bs=16M count=1 of=test.img
    1+0 records in
    1+0 records out
    16777216 bytes (17 MB, 16 MiB) copied, 0.0326881 s, 513 MB/s
    $ echo foo | cryptsetup luksFormat test.img -
    Not compatible PBKDF options.

Whereas for root it still works:

    # dd if=/dev/zero bs=16M count=1 of=test.img
    Please touch the device.
    1+0 records in
    1+0 records out
    16777216 bytes (17 MB, 16 MiB) copied, 0.0183403 s, 915 MB/s
    # echo foo | sudo cryptsetup luksFormat test.img -
    #

For a workaround (from upstream report) with non-root, specify --type luks1:

    $ dd if=/dev/zero bs=16M count=1 of=test.img
    1+0 records in
    1+0 records out
    16777216 bytes (17 MB, 16 MiB) copied, 0.0138972 s, 1.2 GB/s
    $ echo foo | cryptsetup luksFormat --type luks1 test.img -
    $

ProblemType: Bug
DistroRelease: Ubuntu 20.04
Package: cryptsetup 2:2.2.2-3ubuntu2
ProcVersionSignature: Ubuntu 5.4.0-23.27-generic 5.4.29
Uname: Linux 5.4.0-23-generic x86_64
NonfreeKernelModules: zfs zunicode zavl icp zcommon znvpair
ApportVersion: 2.20.11-0ubuntu26
Architecture: amd64
CasperMD5CheckResult: skip
CurrentDesktop: ubuntu:GNOME
Date: Fri Apr 10 14:02:28 2020
InstallationDate: Installed on 2016-10-13 (1274 days ago)
InstallationMedia: Ubuntu-Server 16.04.1 LTS "Xenial Xerus" - Release amd64 (20160719)
ProcEnviron:
 TERM=xterm-256color
 PATH=(custom, no user)
 XDG_RUNTIME_DIR=<set>
 LANG=fi_FI.UTF-8
 SHELL=/bin/bash
SourcePackage: cryptsetup
UpgradeStatus: Upgraded to focal on 2020-04-05 (4 days ago)
cmdline: BOOT_IMAGE=/boot/vmlinuz-5.4.0-23-generic root=UUID=45ed9550-28e7-4af4-a625-9f31663dce9b ro quiet splash vt.handoff=7
crypttab:
 # <target name> <source device> <key file> <options>
 siilo0 /home/jani/.Backup/siilo/luks/siilo0 /root/.ssh/id_rsa noauto,luks,nofail,timeout=10s
modified.conffile..etc.cryptsetup-initramfs.conf-hook: [modified]
mtime.conffile..etc.cryptsetup-initramfs.conf-hook: 2020-04-05T16:38:44.442060