When trying without root:

$ dd if=/dev/zero bs=16M count=1 of=test.img
1+0 records in
1+0 records out
16777216 bytes (17 MB, 16 MiB) copied, 0.0326881 s, 513 MB/s
$ echo foo | cryptsetup luksFormat test.img –
Not compatible PBKDF options.

Whereas for root it still works:

# dd if=/dev/zero bs=16M count=1 of=test.img
Please touch the device.
1+0 records in
1+0 records out
16777216 bytes (17 MB, 16 MiB) copied, 0.0183403 s, 915 MB/s
# echo foo | sudo cryptsetup luksFormat test.img –
#

For a workaround (from upstream report) with non-root, specify –type luks1:

$ dd if=/dev/zero bs=16M count=1 of=test.img
1+0 records in
1+0 records out
16777216 bytes (17 MB, 16 MiB) copied, 0.0138972 s, 1.2 GB/s
$ echo foo | cryptsetup luksFormat –type luks1 test.img –
$