@RajeshChandarS as you have not had any response, I will provide some input.  

NOTE: The below answer came from a GenAI tool.  It is imperative you check the References used to come with this answer.

There are several potential reasons why the password update would succeed in the operator record but fail during login authentication.

Possible Causes for the Login Failure

1. Password Security Requirements
   The new password may not meet all security requirements set in your Pega environment, even though it's being accepted by the API. When updating passwords programmatically, the API might update the record but the authentication service may enforce additional validation rules during login attempts.
2. "Force Password Change on Next Login" Flag
   Check if the "Force password change on next login" flag is getting set to true during your update process. This setting would prevent direct login with the new password, as the system would require an additional password change.
3. Authentication Caching
   Some authentication systems cache credentials. Your password might be updated in the operator record, but the authentication service could still be using cached values.
4. Password Hashing Synchronization
   The password in the operator record is stored as a hashed value. There might be an issue with how the hashing is performed through your API compared to the standard password update process.
5. Missing Additional Steps
   The standard password change process may include additional steps beyond just updating the pyPassword property, such as updating security tokens or timestamps.

Suggested Fixes

1. Ensure your password meets all security requirements defined in your Pega environment (length, complexity, special characters, etc.).
2. In your custom activity, check if you're accidentally setting the "Force password change on next login" flag (pyMustChangePassword) to true.
3. After updating the password, try explicitly setting pyMustChangePassword to false:
4. .pyMustChangePassword = false
5. Verify that you're correctly handling the password hashing. Pega typically uses the bcrypt algorithm for password hashing. Your API should be handling this properly through the pzValidateOperatorPassword activity.
6. Consider adding a clipboard commit and property save after your password update to ensure all changes are properly saved:
7. obj.save();
8. tools.commitClipboardPages();

Programmatic Login After Password Update

For programmatically logging in after a password update, I recommend using OAuth 2.0, which is the preferred authentication approach for Pega APIs:

1. Obtain an access token using client credentials:
   • Use the /prweb/api/v1/authenticate endpoint
   • Send a POST request with your updated credentials
   • This will return an access token for subsequent API calls
2. Example authentication request:
3. POST /prweb/api/v1/authenticate HTTP/1.1
4. Host: your-pega-instance.com
5. Content-Type: application/json
6.  
7. {
8.   "grant_type": "password",
9.   "client_id": "your_client_id",
10.   "client_secret": "your_client_secret",
11.   "username": "[email protected]",
12.   "password": "pyPwdnew"
13. }
14. Use the returned token in subsequent API calls:
15. GET /prweb/api/v1/data/... HTTP/1.1
16. Host: your-pega-instance.com
17. Authorization: Bearer your_access_token

If you're working within the same activity that updates the password, consider implementing a brief delay between the password update and login attempt to allow any backend synchronization to complete.

References:
Users cannot log in
Authentication and authorization
Defining security information for the operator
Authentication login failures