Around 2004 someone gave me Linux CDs (I think it was mandrake?) that I tried to install. And I got stuck at the password input part of the setup, I thought it didn’t work and went back to windows. I didn’t start using Linux until 13 years later… I think I’d have switched much earlier if not for that weird UI decision.
This decision long predates Linux. It's been a staple back to the earliest days of Unix; and it isn't a weird decision if you take into consideration of multi user systems in office environments that have non trivial security considerations (for example telecoms companies), which is exactly where Unix came from.