Earlier quoted context omitted.
You say you do not wish to lull users into a false sense of security. So why not clearly tell people each time Chrome saves a password that the saved password will be visible in plaintext by visiting chrome://settings/passwords ? Otherwise you are lulling people into a false sense of security. E.g., to view passwords in my coworker's Keychain, I have to at least enter their account password to show the plaintext. To…
So why not clearly tell people each time Chrome saves a password that the saved password will be visible in plaintext by visiting chrome://settings/passwords ? Because the vast majority of the population don't know what a browser is, let alone a URL. You (the developer) are providing the illusion of consent. The person don't know what just happened, but you're inferring that they have consented to what it showing up…
There is no technical reason it can't do this. Safari does this if you want to view passwords.
Chrome makes passwords casually available, this is unlike Safari and unlike the Keychain. So either Chrome informs the user of that behaviour or it stops doing it.
What it is doing now is very poorly designed behaviour. I am surprised that you are arguing for Chrome's current implementation.
I fail to see how it is beneficial to the user. As you say, most non-technical users don't know about chrome://settings/passwords, these are also the group of users who most likely need to be reminded of their passwords. So what Chrome is doing is essentially allowing slightly technically competent users to easily peek at the passwords of the "vast majority of the population." Bad design that is easily fixed.