95bits of entropy for a computer, but for an actual user?

Humans are bad at remembering most things. The more entropy there is, the more difficult it tends to be for us to remember.

The way for increasing password entropy, whilst lowering the human bound, tends to be by utilising things humans find easy to remember, but computers find difficult to randomly/brute-force solve.

That usually requires a longer password.

You can sort-of bypass the human memory problem by using password managers, but they have their own set of problems (mostly usability), and assuming people actually use them is an assumption too far in most cases.

With password generation, nothing really. If you want to choose the password yourself, it limits your options (for no good reason for the user).

A long passphrase can be easier to remember than a 5h0rt 5tr1ng. On the mental side, it can take more internal *pointers to remember the latter than the former.

A common reason to limit the length of a password — and doubly so to a power of 2 — is that they’re being stored or passed around as plaintext

I use a password manager with auto-generated password length "turned up to 11" (64 characters). It probably doesn't matter, but I am decreasing the secruity of my password because of their limitation.

It's a restriction without any reason other than decreasing security. (Unless they plan to store plaintext passwords, which should be prohibited by law.)