After a couple of days, my logins magically started working. There must be a delay between creation of sandbox accounts, and synching up with Apple Pay systems. Not sure what other explanation there could be; I was certain I was using the correct passwords, and they simply didn't work until they did.

Also encountering this issue. Anyone out there?

This absolutely needs to be fixed and it's so ridiculous that Apple still hasn't done it, but I came across a decent workaround if anyone can't wait for Tim Apple to wave a magic pencil: https://codepen.io/callumfindlay/pen/VaYeoW