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When you use the useradd command, supplying the password for it is in original text; It will be encrypted and added to /etc/shadow. You need to supply the actual password the user will be using, and not the encrypted hash.
Try using single quotes rather than the double ones. I think what's happening is that the shell is trying to interpret $0 $1, and $7. It didn't find $1 and $7, and so leaves them out. It did find $0, the value of which is "bash".
Or you could try something without $ and /.