> This issue is inherently unfixable by ANY password manager, because the process model of the underlying OS isn't itself secure
Usually the confidential bits are hardware isolated away from the supervisor (host kernel/OS) in Enclaves/TEEs, Realms, Secure Elements, Security chips, etc.
One more reason to use hardware-bound passkeys and not passwords.
No, that is actually very rare, not typical. Do you have any examples of password managers that do that?