String comparison in Mybatis SQL Fails

Question

There are two cases, one of which passes while other fails.

Case 1: Fails or Returns 0 for all #{password} values

SELECT @out = CASE WHEN (SELECT CONVERT( VARCHAR(MAX), DECRYPTBYKEY(hashed_key)) AS someKey FROM t_key_table WHERE is_active = 1) = '#{password}'
                    THEN 1 
                    ELSE 0 
                  END   

Case 2: Passes on correct ${password} value and returns 0 for others

SELECT @out = CASE WHEN (SELECT CONVERT( VARCHAR(MAX), DECRYPTBYKEY(hashed_key)) AS someKey FROM t_key_table WHERE is_active = 1) = '${password}'
                        THEN 1 
                        ELSE 0 
                      END 

Currently my reasoning is that #{} returns PreparedStatement which might hinder with the comparison process, but i am unable to find any specific doc or something concrete to help me understand this. Any help is appreciated.