Replication Server 12.6 supports the -X option in isql that sends encrypted passwords through the network when making a client connection.
configure replication server set send_enc_password to 'on'
To ensure that all Replication Server client connections, including the first connection to the RSSD, send encrypted passwords, set the configuration parameter RS_enc_pw to on in the rs_name.cfg file using a text editor.
If RS_enc_pw is on, all Replication Server connections to the RSSD send encrypted passwords, even if send_enc_password is off.