Hi Robert Bergqvist,
From what I know, this behavior has been observed in some environments where shared device mode interacts with cached credentials and session tokens. Essentially, when the device locks, the cached session may not properly revalidate against Entra ID, leading to the incorrect password message.
When you select switch account and re-enter your credentials, the system forces a fresh authentication against Entra ID, which is why it succeeds. To mitigate this, I recommend ensuring that your devices are running the latest Windows updates and that the Entra ID shared device configuration policies are applied consistently through Intune. You may also want to review whether Fast Sign-in or credential providers are enabled, as these can affect how sessions resume after a lock.
Another useful step is to clear cached credentials and reapply the shared device configuration profile. In some cases, disabling password-only unlock and enabling PIN or Windows Hello can bypass the issue entirely. If the behavior persists, I suggest capturing logs via the Microsoft Endpoint Manager console to confirm whether token refresh failures are occurring during unlock.
I hope this explanation clarifies why you are seeing the wrong password message. Feel free to reply if you need some help from my side.
If you find this answer helpful, please consider clicking Accept Answer so I know your issue has been resolved.
Jason.