This is much worse than people realize once your situation "triggers" the problem.
A few users who claim "this is not happening" to themselves is part of the problem.
You must stop using Apple's password invention if you have any complexity in your needs.
If you have something like 1Password or the other good ones, DO NOT introduce what is basically a virus into YOUR ecosystem of passwords. You could lose all passwords, access to banking -
•••Trigger? Simply changing a password and assuming Apple prepared for that. NO.
•••You will know it's not working but... you will become disconnected and a security risk to your banks because we always get THREE attempts, and this BUG/FAILURE leaves you with 1 chance if you assume you know your password. Watch your online life crash in an endless loop of authentication steps, failures you don't understand, and being blocked,=.
•••There is also a glaring arrogance shown by Apples "Nanny-state" attitudes. "Our customers are not to be trusted with information they will screw up every time so we must block and discourage access" SEE: THE LIBRARY? really I hate them every time that comes up. The "passwords app" has ZERO "show in app" (never worked), or "show in finder" its unforgiveable. USER MUST NOT BE ALLOWED TO GET DIRECTLY TO THEIR PASSWORDS because they are dumb.
Workaround: completely DELETE the entire entry, not the password. WIPE IT OUT.
Then, start over fresh as if the new password was your first ebtry.
You lose everything.
Worst? You cannot fully shut down the look alike POPUP box from Apple so you will be trapped in starting to use it over ad over and over again. EVEN IF YOU TURNED IT OFF.
Google Passwords? Better, but if you use 1password, you are unknowingly using them BOTH, becaue GOOGLE won't let you escape from the program either. Try turning it off - and not falling into any of their simple traps.