Changing the BLE Security LESC/Legacy passkey during run time?

Question

I am attempting to change the passkey used in BLE Pairing/Bonding. In this case, I am using legacy pairing/bonding. 
 My idea is to have the central provide the passkey to the peripheral at runtime, using an unencrypted BLE service. 
 I would like the peripheral to read this characteristic, change it's passkey, and then set the key store with this passkey. The central would then provide this 6 digit key to the user to pair/bond. All other characteristics remain encrypted. 
 I am running into issues executing this idea however. 
 My code returns with a NRF_ERROR_INVALID_STATE. I am attempting to set the passkey during the BLE_GAP_EVT_PASSKEY_DISPLAY event. 
 This occurs when attempting to connect to an encrypted service/characteristic and hitting the following code: 
 
 case BLE_GAP_EVT_PASSKEY_DISPLAY:
 {
 uint8_t passkey[6] = "234567";
 // Reply with an authentication key. 
 // m_static_pin_option.gap_opt.passkey.p_passkey = passkey; 
 // err_code = sd_ble_opt_set(BLE_GAP_OPT_PASSKEY, &m_static_pin_option); 
 err_code = sd_ble_gap_auth_key_reply(p_ble_evt->evt.gap_evt.conn_handle,
 BLE_GAP_AUTH_KEY_TYPE_PASSKEY,
 (uint8_t *) passkey);
 APP_ERROR_CHECK(err_code);
 char passkey2[7];
 memcpy(passkey2, p_ble_evt->evt.gap_evt.params.passkey_display.passkey, 6);
 passkey2[6] = 0;

 NRF_LOG_INFO("Passkey: %s", nrf_log_push(passkey2));
 } break; 
 
 There is similar code provided here which sets the key during 
 devzone.nordicsemi.com/.../216040 
 
 gap_params_init() 
 
 however, my idea needs access to an existing characteristics during a pairing attempt. 
 
Appreciate the help.