Curious if you've reset your entire "Apple Home" automatons or fully rebuilt your Apple Home setup?
Actually, yes, I just did, although for a seemingly unrelated issue. So far, the password issue hasn’t reappeared, although it hasn’t been quite long enough to declare the problem solved.
I took my iPhone into the Apple store to have the screen replaced, and when I got home the entire Home setup was screwy. All kinds of accessories were missing. Maybe a coincidence, or maybe something happened at the Apple Store. I don’t know.
A similar thing happened about a year ago, like the home setup reverted to where it was several months prior.
This time I went for the nuclear option and ditched my 16-month-old Home setup, and created a new home with a different name.
I have two Hue bridges, and a bunch of other accessories — maybe 80 total — so starting from zero and building a new setup was a major pain that took days, what with scenes and everything.
So far, so good. Hopefully that solved the password issue for good.
I have found Apple’s HomePod/HomeKit support to be seriously lacking. It’s all geared toward basic nonsense, with nothing useful for folks with more complicated setups.
And next time my iPhone needs repair, I’ll be sure to disable the Home setting on the device, just in case.