What is a login error?
The LoginError event is raised when the credentials entered by the user are invalid. You can use the LoginError event to redirect the user to a custom error page, to offer additional help, or to log failed login attempts.
Which error message is better when users entered a wrong password?
In some contexts you don't want an attacker to be able to guess the existence of an account. So you'll always return the generic error message so that an attacker cannot guess if this account exists or not.