Currently on recent fresh installs it is impossible to add & enable (set password) for an add. user thru the system settings panel directly.
The first attempt to enable an 'acceptable' password usually appears to fail, subsequent attempts will work but the password willl never be accepted at login screen
Bug here, has been requested to file upstream which in this case atm I've no real interest in doing so.
(if anyone seeing this wishes to, feel free...

Workaround & from my perspective 'better' method.

Instead of trying to create & set an acceptable password in the panel, choose "Action" > Choose password at next login

Advantages -
Actually works
Only requires a min of any 6 char password instead of the nonsense that the panel can go thru when trying to create an acceptable password