ssh-agent stopped working

I'm seeing this too (Mac, 1Password 8.9.11, Terminal.app):

sign_and_send_pubkey: signing failed for ED25519 "SSH Key" from agent: agent refused operation

In my case the issue seems to be because I use a Touch ID laptop with an external display and the lid closed. If I open the lid, quit/lock 1Password, and unlock using Touch ID then my SSH command works. I can then close the lid and it continues to work.

The clue for this was in the logs:

ERROR 2023-01-06T09:37:30.131 tokio-runtime-worker(ThreadId(4)) [1P:op-automated-unlock/src/lib.rs:295] Failed to authorize using system biometry: FailedToUnlockWithKeys(BiometryUnavailable)
INFO 2023-01-06T09:37:30.131 tokio-runtime-worker(ThreadId(4)) [1P:ssh/op-ssh-agent/src/lib.rs:460] Session was not authorized