It lacks the most infuriating rule found in the wild, an upper limit on the length of the password (that's not at least in the thousands due to e.g. request size limits).
For there to be more security in allowing passwords thousands of digits long the host would very likely being storing your password in plain text as opposed to pulling out a few thousand bytes out of an XOF (extendable output function).
in my opinion password size should be oriented towards preventing DoS attacks, little more
(also you can prehash the password on the client with a quick non-password specific but still cryptographically strong hash and then use a proper hash server side, so that on the network all passwords are 256 bits