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I had exactly the same issue.
then I realized that in another repo it worked. So then I realized each Repo needs to have it's own environment variables set up. If you don't set up the DOCKER_USERNAME and DOCKER_PASSWORD in your example under the "Environment variables" section in the Repository settings, it would raise that confusing docker terminal (tty) error.
Can find the settings probably in this URI: <your_repo_name>/admin/addon/admin/pipelines/repository-variables
Once I fixed that, it worked fine.
I guess you already figured that out :) but for others to come...