I was logging in and sure I typoed my password but it worked.
Then I tried typoing it again and it failed.
Then I started to wonder ... yeah after like 8 characters it just didn't matter.
I emailed them and did not get a response, but to their credit they fixed it within about a month. Maybe that was planned already but at least they fixed it.
A few years later I actually had visibility inside that bank due to my work. There was a whole IT team dedicated to "review this and fix the horrible decisions we made in the past". I didn't have visibility to their web interactions / front end and such but it wouldn't surprise me if that was just as much a project to clean up.
To their credit whenever I talked to the "clean up" type team they were super sharp guys and quite willing to listen to outside vendors (me) who sometimes saw stuff the guys inside maybe didn't.
When all bits have been cleared, remove the logic for inspecting the bit and the mark bit. If that takes too long, force your users to update their password at whatever pace suits you.