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Their second description is not 2FA, but password recovery.

At best, the support rep is confused between the two, very different, flows.

Your understanding of 2FA is correct. If what the support rep said is accurate, I wouldn't trust them with my money.

Agreed. I planned on moving my money over the next few weeks but now I’m just going to close my account.

About the support, (of course) it was two different people who responded. Even though I kept the same email chain.