Why does the cloud need to know the wifi password to support mgmt functionalities? The only reasons I can think of right now are for more "automatic" setup of a second unit for meshing or if you want a factory reset to have the same password. Both of those cases have better solutions.
If it's for setting a new password I don't see why they need the old one, if it's for remote management access using the wifi password as the access credential then that seems both bad (access to my network should not mean access to manage it) and like it can be done a lot better if actually needed (send just a well salted and hashed password).