Hello,
Sorry that you are still experiencing problems signing in with your password.
Since you’re able to sign in using alternate contact methods, this indicates that your account is still active and that there are no issues with the account itself. Because you receive the error specifically when signing in with your password, this may be a temporary issue with Microsoft’s backend for your account, which should automatically resolve over time.
As a final step, we can try the account recovery form.
Even though the password reset process appears to work, the actual login continues to fail, which is unusual. Please try the account recovery form at https://account.live.com/acsr.
This is a more thorough identity verification process than a standard password reset.
Note: Turn off two-factor authentication before using the account recovery form. The account recovery form can only be used if two-step verification is not turned on.