I see this sentiment a lot and IMO it over-simplifies the security model pretty drastically. It's unlikely that a 1P vault is breached or leaked. For most people, the most likely threat vector for a random internet account is:
1. they re-use a password across sites
2. one site gets breached and that password is included in a hash dump (probably associated with their email)
3. one the hashes are broken, an attacker can try that password on another site
In this situation, MFA stored in their password manager is still MFA because the TOTP secret wasn't leaked with the password (or it was and then it doesn't matter where you store it on your end).The only case in which storing MFA secrets with your passwords becomes an issue is if other people have access to your laptop (and password manager). Then you'd probably want passwords on the laptop and MFA on your phone (or something else kept on your person).
Nobody questions leaving a yubikey in a laptop (which is also full of passwords). Even if doing so means anyone with your laptop can use your yubikey, it narrows your attack vector from "anyone who got your password" to "anyone with physical access to your laptop", which is a great reduction in scope (for most people).