Earlier quoted context omitted.
PKCE, OAuth 2.0 for Native Apps and the Device Code flow are a thing. In practice all of these clients work so well with OAuth 2.0, that the implicit and resource owner password credential grants have been removed from OAuth 2.1 and are the latest OAuth 2.0 BCP forbids the password grant and strongly recommends against the implicit grant.
... so, then, there is a need for something other than a shared opaque random string API key? I feel like I'm being argued in a circle by a series of strawmen.
But if you want access to user information, you can't just give access to an app that has a shared secret key to a all user data for every single users in the planet. You need to authenticate the user somehow, and sharing the user's password directly with the app is not a good idea for many reasons.
Even if you trust the app to be "written without any bugs", the moment you allow the password grant in OAuth, your service cannot use CAPTCHA, MFA or Passkeys efficiently. The password grant does not allow any of these, so this app that you've let through becomes the weakest link for all cybercrime groups that want to attack your service.