fix: show an appropriate error when a provided password fails its challenge

With this change the user now gets appropriate error feedback when trying to unlock their accounts using an incorrect password.

Additionally password entry is temporarily suspended in the UI while key derivation (etc.) is in progress.
This should help convey the idea that "something is happening", or rather avoid the impression that "nothing happens" or "this is broken" when in fact key derivation may simply be slow depending on the machine.