The Android app would previously only send Thread credentials to the system once, so if they changed after that the system would continue to use old, outdated credentials. This week’s beta release (2023.7.7) includes a fix for it.
Alternatively you can delete all data for Google Play Services, which holds all Thread credentials. This will force apps to send new credentials. Keep in mind though that this will also clear things like your Google Pay cards and you’ll have to wait several minutes while it downloads Matter/Thread support in the background.