"Without a human in the loop, there’s still some “thing” that gets compromised, whether it’s a token or something that generates time-limited tokens."
Speaking knowingly reductionistically and with an indeterminate amount of sarcasm, one of the hardest problems in security is how to know something without knowing something. The first "knowing something" is being able to convince a security system to let you do something, and the second is the kind that an attacker can steal.
We do a lot of work trying to separate those two but it's a really, really hard problem, right down at its very deepest core.
I know I was amused 5-10 years ago as we went through a lot of gymnastics. "We have an SSH password here that we use to log in to this system over there and run this process." "That's not secure, because an attacker can get the password. Move that to an SSH key." "That's not secure, an attacker can get the key. Move the key into this secret manager." "That's not secure, an attacker can get into the secret manager. Move it to this 2FA system." "That's not secure, an attacker can get the 2FA token material, move it to...."
There are improvements you can make; if nothing else a well-done 2FA system means an attacker has to compromise 2 systems to get in, and if they are non-correlated that's a legit step up. But I don't think there's a full solution to "the attacker could" in the end. Just improvements.
A sk- key with no user presence test to use and pin to update is pretty perfect in my book.. Anything less and the authentication can too easily be permanently stolen out of pointless soft protections any more and the decisions are overly complicated hoops for whatever they were supposed to deliver.