@nikitonsky You’re correct; an intuitive interpretation of a pass key is a randomly generated password. They’re better than passwords because you can’t use them in a phishing site, and because they’re guaranteed to be unique. And it’s not really possible to steal them.
However, the UX is not as refined as using a password - it’s closer to using a hardware security key. Implications for recovery are similar, if that’s your only way in.