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This actually an issue of krb5-appl: krb5-appl-1.0.3-7.el7
The only ciphers that are implemented in libk5crypto and which are also specified for use in telnet are DES and triple-DES. We could probably use the DES3 support as a building block to add support for DES3_OFB64 and DES3_CFB64 but if you'll ever need anything stronger, you'll probably have to use SSH.