Login to the Karaf shell
ssh -p 8201 admin@localhost
Enable password encryption using SHA-512
config:edit org.apache.karaf.jaas
config:property-set encryption.enabled true
config:property-set encryption.algorithm SHA-512
config:update
Set a new secure admin password
jaas:realm-manage --index 1 --realm karaf
jaas:user-add admin my-secure-password(1)
jaas:update
1 Replace my-secure-password with a strong password

Logout and try login to verify your new password is set.