Earlier quoted context omitted.
It's still a second factor, just one that isn't as isolated as separate physical hardware. It's certainly more secure than a single password, while still giving the user absolute control over it. I can see this being very useful for accounts which are effectively throwaway, but they still force you to 2FA. The same is true of TOTP generators.
Is having 2 passwords to login considered 2-factor? Or single-factor because they're both the same type of authentication...
It‘s always based on the
1) something you know,
2) something you have,
3) something you are
categorisation. Multiple use of a single category still counts as one factor.