[RHV] engine-backup fails with "FATAL: Failed notifying engine" message

Issue

The RHV engine-backup fails with following error for root user

Backing up:
Notifying engine
FATAL: Failed notifying engine

More information is possible to see in the engine-backup log

2022-10-13 06:00:02 3939: Generating pgpass
2022-10-13 06:00:02 3939: OUTPUT: Notifying engine
2022-10-13 06:00:02 3939: pg_cmd running: psql -w -U engine -h localhost -p 5432  engine -t -c SELECT LogEngineBackupEvent('files', now(), 0, 'engine-backup: Backup Started, scope=files, log=/var/log/ovirt-engine-backups.log', 'test', '/var/log/ovirt-engine-backups.log');
psql: error: could not connect to server: server closed the connection unexpectedly
        This probably means the server terminated abnormally
        before or while processing the request.
2022-10-13 06:01:06 3939: FATAL: Failed notifying engine
2022-10-13 06:01:06 3939: OUTPUT: Notifying engine
2022-10-13 06:01:06 3939: pg_cmd running: psql -w -U engine -h localhost -p 5432  engine -t -c SELECT LogEngineBackupEvent('files', now(), -1, 'engine-backup: Failed notifying engine, scope=files, log=/var/log/ovirt-engine-backups.log', 'test', '/var/log/ovirt-engine-backups.log');
psql: error: could not connect to server: server closed the connection unexpectedly
        This probably means the server terminated abnormally
        before or while processing the request.
2022-10-13 06:02:10 3939: FATAL: Failed notifying engine

There is also no error in postgresql log.