UPDATE: I think the login fail was due to having an active login already established to particle on my mobile device. I don't believe it had anything to do with SoftAP. Perhaps the login was blocked because of an active login session. Don't know what SoftAP sees from particle, so I'm guessing here.
In any case, SoftAP succeeds now and nothing has changed except that I logged out of particle before trying it again. To be clear, the active login was from the same device. I believe you can (but haven't tested it) have a login from another device and SoftAP particle login will succeed as long as it's not coming from the same device.