The issue is caused by inability of extender configure to update SSH key at AWS account:
https://github.com/SSHcom/elastic-jump-host/blob/master/docker/cmd/xconf/main.go#L150

Steps to reproduce

1. Deploy the extender stack with name demo
2. Destroy the stack from AWS extender-demo
3. Remove the role from PrivX UI demo
4. Deploy the stack with same name demo again
5. Deploy example SSH hosts and configure its discoverability in PrivX
6. Try to connect to demo target, it would fail

The root cause of the error is old SSH key. The step 1 creates SSH key and imports the key to AWS. The step 2 do not removes this key from AWS. Step 4 creates a new role and new ssh key. However example SSH hosts uses old key, which is not associated with the new role.