After reading many posts in several forum threads regarding tweaking handsoff, wifi, bluetooth, restarts and more, none of that worked for me. Closest was this "Reset iPhone access" in the mirroring app itself, but failing with the error people already described above.
So I decided to manually force clean such credentials. After some trial and error, here are the steps that worked for me:
Close iPhone mirroring app completely
Open your favorite terminal app
Browse to ScreenContinuity user preferences folder:
$ cd ~/Library/Containers/com.apple.ScreenContinuity/Data/Library/Preferences
Delete file com.apple.ScreenContinuity.plist:
$ rm com.apple.ScreenContinuity.plist
Open iPhone mirroring app again and you should be good to to.
If these steps helped you, please upvote! Thanks