You have confirmed that authentication (username/password) is working ok, but still need to verify authorization to use updatevv is configured. I suspect your user privileges are not high enough to allow updatevv, so its prompting for new authentication to give you chance to provide a username/pass that has higher permissions. Check your acl setup with showuseracl to verify "scripts" can updatevv on your VVs.
Example - user snapdemo has been granted updatevv rights on all VVs whos name start with VMWARE_DEV_*
Code:
T800 cli% showuseracl
User Operation Object_Names_or_Patterns
snapdemo updatevv VMWARE_DEV_*