Support

Yes, this is normal. The administrator/.htpasswd file can have the password hashed in one of many different hashing algorithms. Not all servers support all algorithms. If you had used an older version of Admin Tools to generate this file it might indeed not work on other servers. Newer versions of Admin Tools use an algorithm more likely to be supported by commercial hosting providers which is why it works more reliably in use cases like yours.

So, all you need to do is what you've already done: use a new version of Admin Tools to re-apply the administrator password protection.

You can remove it by deleting the files administrator/.htaccess and administrator/.htpasswd from the CLI – the rm command provided by the operating system.

There is no Joomla CLI command provided for creating administrator password protection as it makes no sense. It's not an Admin Tools feature per se. It's a feature of your web server. You can create that .htaccess file yourself, or keep the one already generated. You can generate the .htpasswd file using the htpasswd command-line tool shipped with Apache itself running this from your site's web root:

rm $(pwd)/administrator/.htpasswd 2>/dev/null; htpasswd -bc $(pwd)/administrator/.htpasswd "YourUsername" "YourPassword"

Just replace YourUsername and YourPassword with your desired username and password.

Effectively, yes. When using the Admin Tools administrator password protection feature the .htpasswd is generated by PHP code, including all of the hashing. We do not shell out to call the htpasswd CLI command.

This is deliberate. Many commercial hosts explicitly disable all PHP function to call shell commands and/or implement a security scanner which marks the mere existence of such a feature as a security issue and rename/delete the code file with this feature, or even block the entire hosting account. Yeah, it's a bit like using a nuclear weapon to kill a mosquito. Not all hosts know what they're doing. I'll just say it like that and leave it at that.