This seems to be an old cPanel (like 2005) bug. It could be that some pearl modules are missing. Not able to find or check this information. The best we can do is apologize and report the bug. We can create a SFTP user in the meantime so customers can upload files.
We can try to resync passowrds or change from Pure-FTP to ProFTP (or viceversa). To sync and restart, run this:
/scripts/setupftpserver pure-ftpd --force
That’s all folks, see you later!