The only way for the password message error to show up is if the device returns a 401 (unauthorized). Unfortunately, the firmware also returns a 401 when manual mode is disabled and a station is toggled.
It sounds like the controller isn’t in manual mode but the app thinks it is. During this state, you will get password errors. Is that what’s happening? I guess I need more information as to the state of the device because this is not a normal behavior and I’m not able to recreate it.