I also got this error a few days ago. Had no issue re-adding passport ID back to my wallet.
But I just tried using it in LGA and it gave me an error. Tried a few times and kept giving me an error in the TSA machine.
I had no issue using passport ID in LGA before and fly many times through LGA without an issue.
I'm see if I can use it in Atlanta when I fly back & see if it was that specific machine I used or it's my passport ID.
Has anyone successfully used passport ID since re-adding to Apple wallet?