Password changing error: passwd: User not known to the underlying authentication module

Issue

Regular non-root user is not able to change password.

• When regular user is changing password, error passwd: User not known to the underlying authentication module is returned:

  [bob@server ~]$ passwd
  Changing password for user bob.
  Current password: 
  New password: 
  Retype new password: 
  passwd: User not known to the underlying authentication module
  

• root is able to change the user's password:

  [root@server ~]# passwd bob
  Changing password for user bob.
  New password: 
  Retype new password: 
  passwd: all authentication tokens updated successfully.
  

• Both passwd and shadow have correct file ownership/permission and SELinux file label:

  # ls -alZ passwd shadow
  -rw-r--r--. 1 root root system_u:object_r:passwd_file_t:s0 1575 Oct 30 19:35 passwd
  ----------. 1 root root system_u:object_r:shadow_t:s0       911 Oct 30 20:55 shadow
  
  # lsattr passwd shadow
  -------------------- passwd
  -------------------- shadow
  

• The user is a local user with valid entry in /etc/passwd and /etc/shadow:

  # cat /etc/passwd | grep bob
  bob:x:1002:1002::/home/bob:/bin/bash
  
  # cat /etc/shadow | grep bob
  bob:$6$V5wHc/NmRGVX.QPB$BaY<...>:19296:1:30:7:30::