This is most probably related to your UserModel implementation, most probably named something like ...UserAdapter or something else. Do you inherit from an abstract user adapter class? From which? AbstractUserAdapter?
When setting the password credential, Keycloak tries to remove the related required action, no matter if it is actually set or not. In this removeRequiredAction() method, there is the exception thrown. You’ll have to overwrite it accordingly to your requirements. Or inherit from AbstractUserAdapterFederatedStorage (possibly, some methods would have to implemented a bit differently from AbstractUserAdapter).