> The big drawback of one time passwords is that it doesn't protect against man-in-the-middle attacks such as phishing, which is in practice one of the most common attacks on systems of this scale.

This is true and was definitely a criticism of the old system, where websites would open the NemID iframe and ask you for your username, password and a specific indexed OTP code, without providing any authentication to you. You only notice something weird if it asks you for an the index of a code that is not on your card but maybe the scammer is lucky and guesses an index that you have and then they can use that phished username/password/OTP triple to perform an unauthorized action.

The new system is slightly different, because if you use the mobile phone authentication it will send you a notification to your phone, but if you use the (bespoke, non-standard) OTP dongle it still does not authenticate itself towards the user. However the codes are now time-based so if they collect an OTP code they can only use it in a ~30s window, so the phished credentials have to be used immediately.