Thanks everyone. It was fixed. Here are the steps in case someone run into the same problem. I am sure not all commands below are needed.
-
login (go to OS)
-
docker pull (correct version of supervisor)
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exit (this will trigger a reboot)
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login
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docker pull (correct version of home assistant OS)
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exit
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core rebuild
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supervisor repair
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supervisor update
-
host reboot
Please notice that after all this the reboot host screen came back again:
