The message is also shown when a non-existing user/e-mailadress is entered. This to make sure that by abusing the forgot password module no information is exposed about exisiting accounts.
In your case: check if the microflow requires the emailadres or username (I think it should be username), and if the entered value matches the username.
With kind regards,
I just tried adding the breakpoint(see attached) and it does not point there is an error in the microflow