I have a bug logged with exactly this issue - connects at Wi-Fi level but the App does not see the telescope and still asks you to connect.
My work-around - and it is a pain:
1) After powering up scope, connect phone to the scope's wi-fi (it will say "connected without internet). The App will not think it's connected - will still have "Connect" button live.
2) Click the "settings" button against the Wi-Fi connection on the phone, then click "more".
3) Somewhere near the bottom of that screen, there will be a MAC address selection. You will have the option of native MAC address or Random. Swap it over.
4) Go back to App - and it should show connected.
If you go out of WiFi range, when you come back you'll have to do it again after the Wi Fi reconnects (but this time to where it came from - it's the MAC swap that matters not the end result). This is the same for 5GHz and 2.4 GHz. An esoteric bug in their Wi Fi security layer I think.