Tried a simple thing, opened two remote windows of the same remote server through SSH in Dolphin. Then wanted to copy one file from a remote dir to another remote dir on the same server. The copy got stuck at 0% (the progress bar thingy that pops up was stuck) and had to kill the job.

Is this normal behavior? Shouldn't it just copy the file on the server without the need to run any local job on my PC (I am copying the files on a remote disk only after all)?

This usually shouldn't occur. Can you reproduce what you saw?

Yes, tried it now and the same thing happened. Have 4 jobs running on the background that are getting nowhere, would post a screenshot but printscreen refuses to work. It's probably some kind of bug :/

Please file a bug report regarding this assuming a normal scp client on the console works fine.

Posted a bug report at bugs.kde.org https://bugs.kde.org/show_bug.cgi?id=268156
Hope it helps.