ssh, fail2ban and max login attempts
Your sshd configuration may be more restrictive. Fail2ban would block connections from your IP completely, so you would get a connection timeout.
"Permission denied" shows that you are still able to connect to sshd, so that is most likely where the message comes from.
Check your MaxAuthTries value in your sshd config, and set it at least 1 higher than fail2ban (or set fail2ban to be more restrictive)