Several insights:

• You are missing several semicolons (;) at the end of your code lines. Sometimes they are “added” automatically while parsing, but you should not rely on that and ought to always use them.
• I suggest you use column number notation instead of the A1 notation; that is, writing getRange(1, 5, sheet.getLastRow()) instead of getRange("E:E").
• You need not loop through the rows; using the Array.some() method should be faster (Array.some()):

if (value.some(cell => cell[0] == false)) {protection();}.

• And here comes the important part: what type of data do you have in the E column? If you, a script, or someone else are typing “TRUE” or “FALSE” in those cells, your code should work. However, if the cells are supposed to contain boolean values, there’s the problem: "FALSE" is not the same as false.
• Even when you get your code to work, your protection() function does not effectively protect the sheet. The prompt message will indeed keep popping up until the correct pin is entered, but the non-zero time elapsed between the closing of the previous prompt and the next leaves some time to the user to edit the sheet. I suggest looking into the Sheet.protect() method and the Protection class.

On Edit Function ()

I used the "On Edit" function to automatically lock the sheet if an incorrect entry is made. Additionally, I created functions for locking and unlocking the sheet when necessary.

Trigger Setup:

As a reminder, the duplicate function should be set as a trigger to run on each edit in the spreadsheet.
Go to Apps Script > Triggers.

Set the trigger for Function: duplicate and Event Type: On edit.

Script and Output.

Function that triggers on edit to lock the sheet if “FALSE” is entered in Column E.

function duplicate(e) {
  let sheet = e.source.getSheetByName("Master");
  if (!sheet) return;
  let range = e.range;
  if (range.getColumn() === 5) { 
    let value = range.getValue();
    if (value === "FALSE") {
      lockSheet(sheet);
      protection();
    }
  }
}

Function to lock the sheet.

function lockSheet(sheet) {
  let protection = sheet.protect().setDescription('Sheet locked due to incorrect entry');
  let me = Session.getEffectiveUser();
  
  protection.removeEditors(protection.getEditors());
  protection.addEditor(me);
  protection.setWarningOnly(false);

  SpreadsheetApp.getUi().alert("The sheet has been locked due to a wrong entry.");
}

Function to unlock the sheet with a PIN

function protection() {
  let ui = SpreadsheetApp.getUi();
  let pin = "0000";
  let attempt = "";

  
  while (attempt != pin) {
    attempt = ui.prompt("Enter PIN to unlock the sheet").getResponseText();
    
    if (attempt === pin) {
     
      let sheet = SpreadsheetApp.getActiveSpreadsheet().getSheetByName("Master");
      let protection = sheet.getProtections(SpreadsheetApp.ProtectionType.SHEET)[0];
      
      if (protection) {
        protection.remove(); 
        ui.alert("Sheet unlocked successfully!");
        Logger.log("Sheet unlocked successfully.");
      }
      return; 
    } else {
      ui.alert("Incorrect PIN. Please try again.");
    }
  }
}

PIN

Unlocked Sheeet

Reference

onEdit(e)