I have now gotten 4 comments on my blog and found a couple dozen concurring complaints over on Amazon's Kindle Forums. All are reporting much the same issue, and there are a number of details in common. None of the afflicted owners actually enabled the password. They all report that the update did it to their Kindle Fires.
In case it's not clear, the owners didn't forget the passwords or set them wrong. No, the issue here is that the Kindle Fires are asking for passwords that do not exist. There is literally nothing that can be entered that will fix this problem.
That's really not a good thing, and what's worse is that no one has figured out a solution yet. A couple users have even contacted Kindle Support, but Amazon is just as baffled by this as we are. The only suggestion that the CS reps could make was to do a factory rest. Naturally, the afflicted owners are not exactly happy about that.
And as reports continue to come in this looks like it's going to grow into a truly massive clusterfuck. I have no idea where it's going to end, but this news is important enough that it needed to be shared.
But I can tell you that one KF owner reported that CS said the Kindle tech team is aware of the issue and they are working on a solution. Let's hope they find it soon.