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When password protection is applied to a PDF document, the PDF document will be encrypted.
Acrobat Reader mobile products (for iOS, Android, Windows Phone) have the known limitation where changes cannot be saved to encrypted PDF documents. Therefore, users are not able to make any changes (e.g. filling out forms or adding comments/annotations) to encrypted PDF documents.
As you already know, there is no such limitation in the desktop version of Adobe Reader or Acrobat.
Sorry for the inconvenience.
Inconvenience - this is more like a major flaw in the mobile versions of the software.
Is it known if there are any plans in place to resolve this issue with future app versions?