I am ambivalent about using HSMs to protect password databases, because if you're going to do that, you might as well simply introduce a minimalized authentication server (ie: something with an interface). It'll have approximately the same attack surface, it actually helps your architecture in other ways, and it precludes attackers from getting hashes in the first place (at least, the same way an HSM does with the HM…
This isn't only about HSMs or dedicated services. To anyone reading this thread: the key thing to understand here is: How do crypto-anchors help against attacks that allows `select *` from a database? A: Per-record encryption mediated by a dedicated microservice.
I'm only talking about the AuthN problem, by the way. I'm not making a general argument against circuit breaker architectures.