Just to point out, protecting a key using the secure enclave and syncing it using end-to-end encryption aren’t necessarily mutually exclusive.
The security property you care about is that the plaintext key is only ever processed in use within the secure enclave (transiently, during authentication).
That doesn’t preclude syncing or backing up the encrypted key via a cloud service - if the device allows the application to do that.
Huh interesting, how does that work? I thought the way yubikeys operate the keys are generated on-device and are impossible to remove, and also come in limited number.
How do the decryption keys for the encrypted passkeys get shared between devices?