Probably a feature, not a bug. Most mobile keyboards automatically capitalize the first character by default. With the ephemeral nature of password characters upon entry; it would be easy to miss the capitalization, annoying users. This one small trick probably prevents millions of people from becoming frustrated with Google every single day. And I'll bet it only works one way. If your password was "ABCD", then by my…
That is a text field feature, not a keyboard feature. Google controls all the text fields for gmail. Both in the web version and in their native apps.
[0] https://developer.mozilla.org/en-US/docs/Web/HTML/Global_att...