Issues I am having with getting a sftp working correctly. I have set this up many times, but for some reason this one is not working

I have my /etc/ssh/sshd_config file set like this:

#hch-somename 
Match User hch-somename
ForceCommand internal-sftp
PasswordAuthentication yes
ChrootDirectory /var/sftp/test/data
PermitTunnel no
AllowAgentForwarding no
AllowTcpForwarding no
X11Forwarding no

If the past when setting this like this and using filezilla to connect to the sftp://ip-addr with the username and password it would drop me in the directory based off the ChrootDirectory setting in the /etc/ssh/sshd_config file, however what happens instead is I get an error message like this

Command:    Pass: *********************
Error:          FATAL ERROR: Connection reset by peer
Error:          Could not connect to server

Now the interesting thing is if I change the /etc/ssh/sshd_config file and change the ChrootDirectory to /var/sftp I am able to get logged in with no issues at all. I have never seen this before, hopefully someone can assist me with this.