A friend of mine hosted a password protected lobby in the current beta game and sent me an in-game invitation which I accepted. The problem is that instead of putting me to type the password into a textbox, for me to be able to join the lobby, I was prompted this message without me typing anything…
After several failed attempts, I managed to join his lobby only by clicking on its lobby room name in the browse games list. Only then a textbook appeared and I entered the password.
Although as far as I know, if you receive an invite from a friend in the regular game, you join the lobby automatically, without entering the password