Someone DM'ed me and saying they guessed it could be to minimize damage to a network if someone gets access to an unlocked device. I'm still curious as to whether that is the real reason. But in that case, even if they don't get my WiFi passwords, they could still install malicious certificate authorities and change my proxy/dns settings and bookmarks to spy on me or for a MitM attack, or other stuff like forwarding my gmail or downloading my data (thanks Chat GPT for the ideas). For me that would be worse than someone getting on any of my WiFi networks. I'm often just at a friend's house and trying to get internet from their guest network. But for others who have lots of important stuff on their WiFi, I guess it could be different.
I wish Chrome OS made it an option at the time of saving the password whether to allow showing it later, or offer to store a copy in Google Password Manager, or just allow showing any WiFi password after an OS password verification prompt. At the very least, even a reminder while joining the WiFi that the password won't be retrievable later would suffice so I'll remember to keep a copy in my password manager.