[tremon]

As to your last question, many organizations have a central password management system that lets them audit who uses which password and when. Having the passwords stored in a secondary system makes the audits useless.

[marwis]

Except when they don't have such central password management system yet still block them. Which is what I saw in most large organizations.

[Nextgrid]

Anyone wanting to evade such audits can just write down the password somewhere else such as a piece of paper.