Delegating key derivation and/or password validation, combined with secure UI state indication, to a more secure execution environment can be a big win for security, for example.
I could imagine a passkey implementation with some extensions that allow securely presenting what the user is consenting to and how ("enter your payments PIN or password now to confirm a payment of $x to merchant y").
It's of course even better to do that in tamper-proof security coprocessors such as Apple's secure enclave, but TEEs have the big advantage of having access to much more memory and faster processing, which allows doing more complicated things there more easily.
They can also always lean on the secure hardware for actual key management, but handle more complex user interface operations in an environment that's still more secure than the main OS.
Android has supported something just like that years ago with "protected confirmation" [1], but unfortunately it's only available on Pixel phones and hasn't really been picked up by app developers as a result; the situation for Apple is of course very different, so I have some hopes that if they launch something comparable it could actually see some adoption.
[1] https://android-developers.googleblog.com/2018/10/android-pr...