alt Hacker NewsThe idea is interesting, but I don't think this qualifies as a second factor, as it can be reduced to a factor you have to remember, so equivalent to a password. The second factor should be derived either from something you own, or something that can be obtained from biometry.
In that case nothing based on RFC 6838 would qualify as a second factor because nothing prevents you from just remembering the TOTP secret and compute the one-time code using a piece of JS. Or even putting it in your password manager.
I think it is too simple to reduce the definition of second factor to how it is stored. It is rather a question of what you need to log in. For TOTP the client has the freedom to choose any of (not exhaustive):
1. Remember password, put TOTP in an app on smartphone => Client has to remember password and be in possession of smartphone.
2. Put password and TOTP in password manager => Client has to remember the master password to the password manager and be in possession of the device on which it runs. Technically, you have to be in possession of just the encrypted bits making up the password database, but it is still a second factor separate from the master password.