Can't use SNMP v3 AES-192 and AES-256 encryption?

Could the stronger encryptions be added please?

Also for some ridiculous reason it needs at least 8 symbols for Authentication password.

The problem is that you need Net-SNMP lib needs a minimum of version 5.8 to support this modes.
And now only the actual distributions have version 5.8 (Ubuntu 20.04). Debian 10 has only 5.7 and will not work as an example.
As long as there are only very few distributions supporting this it will not be available i think.
For the enterprise edition it would be easier i think to implement it as the enterprise edition uses pysnmp directly.

I installed it exactly on Ubuntu 20.04 and I still don’t get the option to select 256.

root@CheckMK:~# uname -a
Linux CheckMK 5.4.78-2-pve #1 SMP PVE 5.4.78-2 (Thu, 03 Dec 2020 14:26:17 +0100) x86_64 x86_64 x86_64 GNU/Linux
root@CheckMK:~# apt list snmp -a
Listing... Done
snmp/focal-updates,focal-security 5.8+dfsg-2ubuntu2.3 amd64
snmp/focal 5.8+dfsg-2ubuntu2 amd64

Yes this is correct. As this is one of the only distributions already with the actual SNMP tools you don’t have the option in CMK as most distributions don’t support it.

Is it in the works? A lot of organisations have to use SHA256 at least to comply with regulations.
Some vendors have already dropped support for SHA1 in their products.

SHA256 was no problem. That you can define inside CMK since some time.
The problem is that as privacy protocol the support for AES-256/512 is not very official.
This point is missing inside the SNMP tools of many Linux distributions.