Update: several hours of testing have shown some progress: I set the WiFi router to use only IEEE802.11b/g and moved the RPi closer to the router (right next to it, in fact). Suddenly the problem disappeared.
Then I moved the RPi away from the router again (to the point where the WiFi signal was barely enough to be useable) and LE now complains again with the "invalid-key" error and requests that I enter the "correct" key.So off-hand this does seem to be related to WiFi protocol implementations in some routers and/or signal strength/quality.
Yeah, the tiny RPi onboard wifi antenna... probably a case again where the size is matter ![]()
I'm doesn't had the "invald-key" problem, only the weak signal and unstable connection... so I disabled the the onboard wifi (config.txt) and I'm using an USB wifi dongle with external antenna. Far better wifi connection. If you have an USB wifi dongle or can borrow one for testing, try it...