I disagree this bug is low importance.
Ubuntu 10.10 has Evolution version 2.30.3.
This error is present also when connecting to POP account.

Our company ISP provider allows only one connection to account at time. Other 
connections get "IN-USE" error message.
When this happens, Evolution asks for password. If password is not provided and 
you click cancel, then it doesn't use the stored password but it keeps asking 
until provided.
Now, if company uses a general e-mail address i...@mycompany.com and there are 
several clients checking mail on that POP account every 10 minutes, collisions 
are imminent. Using Evolution becomes extremely frustrating.
"IN-USE" error means "retry later" not "forget your password" and should be 
silently ignored.

-- 
evolution ask for a password when there is an error connecting to an imap server
https://bugs.launchpad.net/bugs/245589
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