It would be abundantly obvious to me if I were going to put my paypal password into anything but paypal, for instance, because I wouldn't even have the option. I'd have to copy/paste if I wanted to, which would up my suspicion level to the extreme.
(this is not to downplay security keys though, I think they're very important)
That's what people say but even security experts have fallen for phishing attacks. And since the autofill is not 100% reliable, it's not that unusual to go into the password store and manually get the password out of there.
I have had it fail to autofill due to site implementation, and the couple of times it happened I was extremely on my guard and triple-checked everything before proceeding.
I think that's the important part of this, the manager has to be reliable enough that the bypass mechanism stands out _a lot_, and the user has to be aware.
Example: "https://hbweb.incompass-solutions.com/" uses the same credentials as "http://www.equineline.com/" since they're both owned by the Jockey Club.
I imagine you can extract passwords out of security keys in some form without being on the correct domain, too.
Do domain check fails that regularly? I'm sure enterprise configuration policies would provide functionality to prevent password extraction should you be inclined to enable it.
There's no UI. Even if you are 100% convinced this is really your bank, you desperately want to sign in, you keep tapping that button, trying again, it can't help the bad guys. There is no "Yes I'm really sure this is my bank" option that destroys your security.
Password managers have to be compatible with the reality of how passwords are used/ abused by site owners. When my preferred electricity supplier was bought by Shell (as part of an exercise in greenwashing the huge fossil fuel company) they rebranded and all their URLs changed overnight. My passwords still worked - but on these new URLs. This looks _exactly_ like a phishing attack, except for the huge advertising spend on a cynical rebranding exercise.
If you sell a password manager that fails in this scenario you're getting customer feedback saying this product doesn't work, fix it. How can you fix it? Add an override, destroy the security value of the product.
But WebAuthn comes out of the box enforcing this rule that the FQDN can't change. When Shell buys the electricity company and says "All your sites need to change" if they used WebAuthn the developer says "I tried that and it breaks login for all customers". "Tell them to override it, put up a banner saying so". "There is no override"... "OK, put the old site back". Done. Users saved from security lapses caused by corporate rebranding.
The WebAuthn people put a bunch of effort into thinking about evil things that can go wrong and defending against them. Having a clean slate to start from helped enormously.
If currently there's no password manager in existence that doesn't let you override the plaintext password extraction / override feature, there's nothing to stop one being made. You could probably hook it in with a system level service which cryptographically signs them, too.
