Seems like an annoying DoS bug for sure. This is why having an actually secure watchdog is so nice. I still don't understand why people jailbreak in 2021.
You have to trust them with your Apple ID (from the FAQº):
Why do you need my Apple ID?
Apple allows anyone with an Apple ID to install apps they’ve built themselves onto their devices for testing. AltStore uses your Apple ID to communicate with Apple's servers on your behalf and perform the necessary steps to prepare your account for installing apps onto your device.
Do you save or send my Apple ID to anyone besides Apple?
Your Apple ID is never sent to anyone but Apple. AltStore does save your Apple ID so it can refresh apps for you automatically, but it is stored securely in the device’s keychain. AltServer does not save your Apple ID, and requires you to enter your credentials each time.
(Ofcourse, Jailbreak isn't necessarily more secure - you have no idea if they inject a malware into your device during the process.)