When changing the user’s password using ALTER USER <username> PASSWORD '<new_password>'; in ACT or in a SQL script running through ACT, you will see an ALTER USER successful message returned. However, ACT does not change the cached password for the user. Because of this, if you then connect as the user and issue another query, you may see an error related to invalid username and password. This is because ACT is using the cached username and password when attempting to establish a new session.
If you encounter this, change the password using the \password command in ACT instead. If you change the password using \password, your ACT connection will continue to work.