> Aaand we're down to single-factor authentication
We're not, not really. The only single password that can unlock 2FA is that for the password manager, but most phishing attacks I'm aware of target the specific services, not password managers, since it's usually way easier to fake a banking login. Good password managers will have dedicated apps, so entering that password on some janky website is not something victims will be used to, plus there should be something 2FA-ish as well (biometrics on an iPhone etc.), so that particular password should be considerably harder to get ahold of than most. That doesn't protect against a fully compromised device, but that's not something 2FA is very effective against anyway. I'd say it's good enough for now.
Perfect shouldn't be the enemy of the good; security is always a trade-off between less-than-perfect alternatives, and the obvious alternative for lots of people will be a .txt on their Desktop or in their Dropbox or even an email to themselves, or no 2FA at all. I've been told that no attacker would find one person's password list since they disguised it as an email draft, who'd think to look there? Putting backup codes in one's primay 1Password vault doesn't fare that badly against those.
> I do recommend a password manager, but not to keep would-be-two factors in one vault.
A separate vault means another password, where do you keep that? It'll be needed very infrequently, so it's easy to forget, especially under stress. Also, you'll want to make sure you have it when you're seven timezones away and just lost your phone, since vacation is prime phone-losing time and also a time when you might have to get at your emails really urgently, e.g. for travel documents; that's also a situation where printing out backup codes on paper might bite you if they stay behind at home. I'm not even sure how I'd set this up, afaik 1Password (Cloud) and LastPass don't support vault-level passwords.
This is a surprisingly little-discussed problem outside of corporate. And when it is discussed, many knowledgeable people view personal security through a corporate security lens, which isn't very practical, making this an IMO pretty underserved niche. I've discussed this with lots of people and I'm still not aware of any silver bullet solution, but the recommendation from TFA seems like a decent compromise for a sizable cohort, especially younger people who aren't comfortable with paper documents and/or are highly mobile.