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Have anyone seen this on a fresh cent7 install

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That's normal, it's just encryption
My root password doesn't seem to be working though. When I use my lantronix spider for the server I can login directly but using putty I get this encryption and my root password doesn't work.
That is very strange if you ask me..
http://imgur.com/Gej5Fjx
Some distro disabled root SSH access. Not sure if CentOS 7 is one of them.
Logging in via SSH and via the console are two different mechanisms.
Check sshd_config and see if root login has been disabled.
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I'm not sure either. I usually don't set a root password and just create an administrative user in Anaconda.
OP doesn't mention how CentOS was installed, so it might be a modification on the part of the host. It's a sensible modification since root shouldn't be used for remote access.
Sounds like SSH has been mucked with. I'd check your SSH configuration file to see if 'PermitRootLogin' got set to 'no', and if they also changed 'Ciphers' (usually not listed in a default config if I recall correctly).
Root login is permitted on CentOS 7 by default so it seems like someone or something has changed the default behaviour after the install completed.
I fixed it by disabling the security on install.