E0 is not allowed with Level 4:

BLUETOOTH CORE SPECIFICATION Version 5.2 | Vol 3, Part C page 1319:

  '128-bit equivalent strength for link and encryption keys
   required using FIPS approved algorithms (E0 not allowed,
   SAFER+ not allowed, and P-192 not allowed; encryption key
   not shortened'

SC enabled:

> HCI Event: Read Remote Extended Features (0x23) plen 13
        Status: Success (0x00)
        Handle: 256
        Page: 1/2
        Features: 0x0b 0x00 0x00 0x00 0x00 0x00 0x00 0x00
          Secure Simple Pairing (Host Support)
          LE Supported (Host)
          Secure Connections (Host Support)
> HCI Event: Encryption Change (0x08) plen 4
        Status: Success (0x00)
        Handle: 256
        Encryption: Enabled with AES-CCM (0x02)

SC disabled:

> HCI Event: Read Remote Extended Features (0x23) plen 13
        Status: Success (0x00)
        Handle: 256
        Page: 1/2
        Features: 0x03 0x00 0x00 0x00 0x00 0x00 0x00 0x00
          Secure Simple Pairing (Host Support)
          LE Supported (Host)
> HCI Event: Encryption Change (0x08) plen 4
        Status: Success (0x00)
        Handle: 256
        Encryption: Enabled with E0 (0x01)
[May 8 20:23] Bluetooth: hci0: Invalid security: expect AES but E0 was used
< HCI Command: Disconnect (0x01|0x0006) plen 3
        Handle: 256
        Reason: Authentication Failure (0x05)
Signed-off-by: Luiz Augusto von Dentz <luiz.von.dentz@intel.com>
Signed-off-by: Marcel Holtmann <marcel@holtmann.org>