The most disturbing thing about iCloud Keychain is that you can get access to all of your stored passwords just by unlocking a device linked to your Apple ID. Not just the ability to log in with them, the actual plaintext.
Not sure what else is expected in this case, you'd get the same behavior from most other password managers.
The latest iOS versions have also included a "five clicks on the power button" emergency option, which disables both TouchID and FaceID. It's not perfect, but if you're going into a questionable situation, it's a good way to avoid being coerced into using those to unlock your phone.
It's not clear what the best solution is here, or if the best way to have the conversation about it follows hyperbole like "the most disturbing thing".
I think password managers are on the whole a good thing because people are using more (stronger) passwords.
I also think the password manager could (at least on trusted hardware like an iPhone) provide some protection from the attacks you're alluding to, such as a tarpit that slows access to the password database, but they certainly won't offer any protection on a desktop machine without specialised hardware and it might be difficult to get right -- difficult enough that new security vulnerabilities are introduced instead.
What exactly do you propose?
Firefox works similarly: Once you unlock it, you see all the passwords. On an iPhone or Google Chrome, you have to click each password you want to see.
Edit: I see you are worried about devices already linked