Fido keys can also be used without password or even an account name (but with pin which becomes the second factor in that scenario). They are very resistant to phishing because they do a challenge response every time that's bound to the domain name of the requesting site. So typosquatting tricks won't work. The private key is generated and stored in the token and they are very resistant to extraction.
In general it's way safer than a password that can be intercepted and reused by anyone who knows it.
but we're talking about google's implementation here, where fido keys are only a second factor. and in google's implementation, allowing passwords to be compromised means compromising your security, because their authentication flow is based around having more than just one factor.
In general it's way safer than a password that can be intercepted and reused by anyone who knows it.