The message means just what it says. You’re signed in with a password. You’ve tried to open a file. The password you’re using to sign in with doesn’t work for the file. You get a message that it’s the wrong password, and you should enter the original file password. You’re now entering the same password you use to sign in. But AxCrypt already tried that password. It still doesn’t work!
If you’ve forgotten your password, please read the FAQ at https://www.axcrypt.net/ .