[Bug]: The new password is not recognized; Metamask only accepts the old password after wallet reset

[anaamolnar]

Describe the bug

After going through the 'Forgot password' flow in Metamask and setting a new password, Metamask throws an 'Invalid password' warning when trying to login with the new password

Expected behavior

Metamask should only recognize the newly set password.

Screenshots/Recordings

Reset.wallet.Chrome.mov

Steps to reproduce

1. Open the extension
2. Proceed to Forget password flow
3. Paste your secret recovery phrase
4. Set a new different password
5. Proceed to Restore your Wallet
6. After entering the account, lock it and try to login with the new password
7. It will throw an Invalid password error

Error messages or log output

No response

Version

12.0.0

Build type

Beta

Browser

Chrome, Firefox

Operating system

MacOS

Hardware wallet

No response

Additional context

No response

Severity

No response