Bullshit IT trick. If they suspect a possible security compromise they’ll force this out to everyone. It gets you to change your password without them revealing that they may have been compromised and had data stolen.

That is not how it works.

They keep a log of the 3 (or more) previously used passwords. If you try to change to any of them, it will give you this error.

So if you changed your password and then forgot. Changing it back to the password before that will tell you not to use previous passwords even if it is not the current password.