This is a bug in the A/UX 2.0 login(1) command. You would not be able to reproduce this by logging in to the console under A/UX 2.0. This feature is a part of the System V login(1) command, which is not executed when logging in to the A/UX console. Instead the /mac/bin/Login program is called, and it does not understand the "*" syntax in the /etc/passwd file. Even when logging into the serial ports or the console when /mac/bin/Login is not present, the chroot does not work. This is one reason why the patch server is still running A/UX 1.1.1.
You should use rsh(1) as a replacement for the functionality that has been lost in the A/UX 2.0 login command until a fix is provided. rsh would normally be the way to accomplish restricted login anyway.