I did a quick test of the login form and saw that it was redirecting to the default wordpress login on fail.
I would like to rule out the possibility of a plugin conflict, so I would like for you to temporarily disable all your non-toolset plugins and try again.
Once you've done this please let me know. If the issue still remains I will proceed to grab a copy of your site so that I can perform some further debugging steps locally.
Hi Shane, thank you! It was a plugin conflict, the "Restricted site access" plugin redirected to the WP login screen. My issue is resolved now. Thank you!