That connection credentials are from a user created in Servicenow -> All -> Users (under "Users and Groups"). The same has the admin and soap roles.
The error is solved by unchecking the "Password needs reset "checkbox in Servicenow -> All -> Users (under "Users and Groups") -> Select the user created for the connection -> Profile.
By when you create a new account, this checkbox is checked by default, and it causes issues as it is not meant for a service account used for automation only.
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