thanks to a bit of learning and this previous post I was able to get a bit further.
I now have the bit of sshd configuration in a separate folder in /etc/ssh using environment.etc and ssh can refer to it but when debugging it now gives this error:
/run/current-system/sw/bin/sshd -ddd -D -f /run/current-system/etc/ssh/sshd_config.d/60-forgejo.conf
debug2: load_server_config: filename /run/current-system/etc/ssh/sshd_config.d/60-forgejo.conf
debug2: load_server_config: done config len = 222
debug2: parse_server_config_depth: config /run/current-system/etc/ssh/sshd_config.d/60-forgejo.conf len 222
debug3: checking syntax for 'Match User git'
debug3: checking syntax for 'Match all'
debug1: sshd version OpenSSH_9.9, OpenSSL 3.3.2 3 Sep 2024
debug1: Unable to load host key: /etc/ssh/ssh_host_rsa_key
debug1: Unable to load host key: /etc/ssh/ssh_host_ecdsa_key
debug1: Unable to load host key: /etc/ssh/ssh_host_ed25519_key
sshd: no hostkeys available -- exiting.
which is a bit strange since my host does have ssh keys of 2 of those types and under those file names.
Unless its referring to the container keys which indeed dont exist. Im not sure though.