if passretry == 'yes' or 'Yes':
the above if statement is evaluated as: -
if (passretry == 'yes') or 'Yes':
Now, since 'Yes' is evaluated to True, so, your if statement is always True, and hence you always have to enter new password.
You need to change the condition to: -
if passretry in ('yes', 'Yes'):
likewise, the following elif should be changed to: -
elif passretry in ('no', 'No'):