Hi max_sherman,
Do you still see the same incorrect password after restarting your iPhone? We ask this as restarting can help refresh the iOS and resolve unexpected issues. If needed, the steps below will show how:
"How to restart your iPhone X, 11, 12, 13, or later
- Press and hold either volume button and the side button until the power-off slider appears.
- Drag the slider, then wait 30 seconds for your device to turn off. If your device is frozen or unresponsive, force restart your device.
- To turn your device back on, press and hold the side button (on the right side of your iPhone) until you see the Apple logo."
Those steps are from this article: Restart your iPhone - Apple Support Also, do you see the same prompt if you try signing into your Apple ID while your iPhone is connected to a different internet network? Knowing this can help isolate if the issue is related to a specific network or not.
Take care.