Doesn't feel like a bug to me. After disabling iCloud Passwords I see a big nag in the Passwords menu asking me to enable it again; I don't remember that there on iOS 16.

And when it was enabled there was a nag for Passkeys or password family sharing or something like that. I guess they want people to use that now.

Also I don't understand how you could screw these things up repeatedly for so many features. iMessage is another one that iOS loves to enable again. I just checked: it's enabled again. Turned it off. And the one with Bluetooth that lapcat mentioned. I don't believe these things to be bugs.

But they really crossed the line for me with Passwords.