I ran into this problem as well using Cloudmin GPL (7.4.kvm) and removing those lines did not work for me.
I looked at the code (server-manager-lib-funcs.pl, check_ssh_key_data) and it looks like the issue is the regexp back match: $3 should be $4. I made the patch to my local copy and I can now add a private key properly via upload or pasting it in.
But there seems to be a larger issue here. It appears that the first key generated MUST either be generated by Cloudmin or be a private key. Once one gets over that hurdle, one can add public keys that get added to newly-created VMs (which was my original intent). Is that a bug in the code, UI, or an issue with my understanding?