The error is not a Toad issue:
ERROR [08001][IBM] SQL30082N Security processing failed with reason "1" ("PASSWORD EXPIRED") SQLSTATE=080011
The IBM DB2 default password might be expired. See this link.
https://www.ibm.com/support/knowledgecenter/en/SST55W_4.1.0/liaca/liaca_db2_pswd_expired_cant_login_ssp.html
What I know, It could be that once your UNIIX password has expired, you cannot set it via the db2 connect command. It could also be that if your password is set to be changed upon your initial login, you then cannot set it via the db2 connect command.
I advise you to contact your systems administrator to have your password reset outside of the db2 connect command. Once your password issues have been resolved, you should be able to login to the database in Toad.