Password managers are adding support (as in they control the keys) and I've used my yubikeys as "passkeys" (with the difference that I can't autofill the username).
It's a good spec. I wish more people who spread FUD about it being a "tech-giant" only thing would instead focus on the productive things like demanding proper import/export between providers.
You realise that the second your password manager has it, then it's no longer MFA but it's just 1 factor authentication with extra steps right?
Password manager turns something you know into something you own. If also the something you own is in the password manager itself… it's the same as requiring extra long passwords.