Well, the server is 2.3.4. I used a dummy endpoint for tests with 2.3.7 with the same result, so this is a non-issue. Yes, SHA1 is an auth scheme, not an encryption scheme. What makes me wonder is that the dummy endpoint as well as the actual server, when having no auth defined on both sides (hence SHA1 is to be used), the auth works -as expected- but when there' s a config error in encryption or compression, connection breaks -as expected- with an appropriate error message.
In the current config/setup however, no matter how erroneous my encryption config or my compression may be, it doesn't even get to the point of complaining the wrong config. This makes me think that maybe there is something wrong with the auth mechanisms to be used by default by the current pfsense version