So the password that it isn’t taking is the MM password, correct? Assuming your ‘real’ seed is now on the hardware device. If so, and you don’t have any assets in the ‘dummy’ MM account, then remove the MM extension, reboot and then re-download the extension from the legit MM site (at metamask.io).

Reinstall the MM extension and setup a new dummy seed (can use the old dummy seed or let it create a new one; doesn’t matter as you don’t even use the dummy). Then redo the “connect hardware wallet” steps to get the HW accounts to show in the MM list of accounts. You essentially never want to put the ‘real’ 12 seed words(with the nodes on them) into a PC every again, unless an emergency. Hope that helps…