Having done this kind of support before (mixed hardware + software), a large number of people present their computer with multiple vague problems that can very well be a set of issues with both the actual physical hardware AND with whatever they have done to their actual user account on their operating system.
Most want all their problems fixed with as little action required on their part as possible, with as much certainty as possible, and do not care about security in the least.
People are hard to reach once they are out of your sight, and get very unpleasant when things take a while....even when they take a while largely because they didn't get back to you in a timely manner (because you turn out to actually need their password to troubleshoot their configuration).
"Wipe the device and start fresh" is understandably not a valid solution to most users (especially as anything other than last-resort), even though it'll rule out a large portion of potential software problems.
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To note on some other elements I see in this thread:
- Hardware diagnostics exist in some form on most devices. They do not catch every problem that exists, and are often especially bad with more intermittent issues. If the complaint is that Facetime drops out after 10 minutes, the most certain you can be that the issue is resolved is by running those diagnostics AND booting to their actual user account and having Facetime work for 15 minutes. No one cares that "it passed the Camera diagnostic" when they've still got a problem when they get home with their "fixed" device. Many people actively want you to be signed into their account and do exactly what they did to confirm the issue no longer happens.
- IIRC you can't actually boot a modern (T2) Mac to an external drive without an Admin password being entered at least once to change the Startup Security Utility settings.
- Whether being run as a business or as internal support in an organization (more so a college or the like with personally owned devices), time matters. Getting credentials from everyone who's willing regardless of if they turn out to be necessary is absolutely terrible security practice, but great for turning around repairs more quickly and with fewer repeats of devices coming back because the issue isn't fixed.
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tl;dr - Sensible security practices are at odds with everything else the average person wants from their computer repairs.