I believe this is the fix we're looking for :)

improv-wifi-mod/bleservices/improv.json

@@ -40,4 +40,4 @@
 			}
 		}
 	}
-}
+}

improv-wifi-mod/improv-wifi-mod.js

@@ -5,6 +5,8 @@ import BLEExports from './consts';
 const StateCodes = BLEExports.StateCodes;
 const ErrorCodes = BLEExports.ErrorCodes;
 const Commands = BLEExports.Commands;
+
+// FYI class definition for BLEServer can be found @ <moddable-project-dir>/modules/network/ble/bleserver.js
 export default class ImprovWifi extends BLEServer {
     deviceName;
     ssid;
@@ -23,6 +25,7 @@ export default class ImprovWifi extends BLEServer {
         this.onCredentialsRecieved = onCredentialsRecieved;
     }
     startImprov() {
+        trace("Starting Improv\n");
         let advertisingData = {
             flags: GAP.ADFlag.LE_GENERAL_DISCOVERABLE_MODE,
             completeUUID128List: [uuid `00467768-6228-2272-4663-277478268000`],
@@ -32,32 +35,37 @@ export default class ImprovWifi extends BLEServer {
         this.startAdvertising({ advertisingData });
     }
     onDisconnected() {
+        trace("Disconnected\n");
         this.state = StateCodes.STATE_AUTHORIZED;
         this.error = ErrorCodes.ERROR_NONE;
         this.errorCharacteristic = null;
         this.stateCharacteristic = null;
         this.startImprov();
     }
     onReady() {
+        trace("Ready\n");
         this.startImprov();
     }
     onCharacteristicRead(characteristic) {
-        switch (characteristic.name) {
+        trace(`Read: ${JSON.stringify(characteristic)}\n`);
+        switch(characteristic.name){
             case "ERROR":
                 return this.error;
             case "STATE":
             case "RPC_RESULT":
                 return this.state;
             default:
                 trace(`I have no idea what ${characteristic.name} is supposed to be`);
-                return this.error;
+                return this.error
         }
     }
     onConnected() {
+        trace("Connected\n");
         this.state = StateCodes.STATE_AUTHORIZED;
         this.error = ErrorCodes.ERROR_NONE;
     }
     onCharacteristicNotifyDisabled(characteristic) {
+        trace('onCharacteristicNotifyDisabled\n');
         switch (characteristic.name) {
             case 'STATE':
                 this.stateCharacteristic = null;
@@ -77,6 +85,7 @@ export default class ImprovWifi extends BLEServer {
         }
     }
     onCharacteristicNotifyEnabled(characteristic) {
+        trace(`onCharacteristicNotifyEnabled: characteristic: ${characteristic.name} \n`);
         this.notify = characteristic;
         switch (characteristic.name) {
             case 'STATE':
@@ -102,11 +111,13 @@ export default class ImprovWifi extends BLEServer {
         }
     }
     onCharacteristicWritten(characteristic, value) {
+        trace(`Written: ${characteristic.name}, in state ${characteristic.state}, with value ${value}, value[0] is ${value?.[0]}, which is a type ${typeof value?.[0]} \n`);
         // this is where we go and update state again if necessary
         switch (characteristic.name) {
             case "RPC_COMMAND":
                 this.ssid = value;
                 if (value[0] === Commands.WIFI_SETTINGS) {
+                    trace("Handling wifi settings\n");
                     this.state = StateCodes.STATE_PROVISIONING;
                     this.notifyState();
                     this.handleInboundWifiSettings(value);
@@ -123,6 +134,7 @@ export default class ImprovWifi extends BLEServer {
         }
     }
     handleInboundWifiSettings(data) {
+        trace("Handling inbound wifi settings\n");
         const ssid_length = data[2];
         const ssid_start = 3;
         const ssid_end = ssid_start + ssid_length;
@@ -132,33 +144,42 @@ export default class ImprovWifi extends BLEServer {
         const ssid = this.buildValue(data, ssid_start, ssid_end);
         const password = this.buildValue(data, pass_start, pass_end);
         let result = this.onCredentialsRecieved({ ssid, password });
+        trace(`Result of onCredentialsRecieved is ${result}\n`);
         if (!result) {
-            this.state = StateCodes.STATE_AUTHORIZED;
-            this.notifyState();
-        }
-        else {
-            this.state = StateCodes.STATE_PROVISIONED;
-            this.notifyState();
+            trace("Credentials weren't authorized :( \n");
+            this.state = StateCodes.ERROR_UNKNOWN;
+            this.error = ErrorCodes.ERROR_NOT_AUTHORIZED;
+            this.notifyError();
+            return;
+
         }
+        trace("Credentials were authorized :) \n");
+        this.state = StateCodes.STATE_PROVISIONED;
+        this.notifyState();
     }
     buildValue(data, start, end) {
+        trace(`Building value from ${start} to ${end}\n`);
         let str = '';
         for (var i = start; i < end; i++) {
             str += String.fromCharCode(data[i]);
         }
         return str;
     }
     notifyState() {
+        trace(`Notifying state: ${this.state}\n`);
         if (!this.stateCharacteristic)
             return;
         this.notifyValue(this.stateCharacteristic, this.state);
     }
     notifyError() {
+        trace(`Notifying this characteristic: ${this.errorCharacteristic?.name} this error:  ${this.error}\n`);
         if (!this.errorCharacteristic)
             return;
+
         this.notifyValue(this.errorCharacteristic, this.error);
     }
     couldNotConnect() {
+        trace("Could not connect\n");
         this.error = ErrorCodes.ERROR_UNABLE_TO_CONNECT;
         this.notifyError();
     }