This is a really cool project! One thought that I have: would there be an issue sending this file in an unsecure context where MITM is a possibility? Alice sends Bob her HTML file over an unsecured medium, and Jane intercepts this traffic, and gives Bob a modified HTML file that will report the password back to Jane. Jane can set it up so that the browser still displays the local file as it's source, but has an HTTP…
For this persons use case though, assuming they’re not a person of interest to any “threat actors”, I wouldn’t be too worried.