rsync
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actually store known hosts
the public key for a known host is currently saved, but is not actually used.
The Rsync call still needs ssh -o StrictHostKeyChecking=no, otherwise we get a host key verification error.
I had this same problem in a similar implementation.
In our case, the home directory was /github/home/, but rsync/scp/ssh itself were using /root/.ssh/ !
So if you haven't tried it yet, I'd recommend trying -o UserKnownHostsFile= $SSH_PATH/known_hosts for the rsync SSH arg, or using SSH_PATH="/root/.ssh"