You're mixing stuff up here. If you lost your password, your existing backups are not recoverable regardless of what the article is talking about. This includes

You're mixing stuff up here. If you lost your password, your existing backups are not recoverable regardless of what the article is talking about. This includes the "lost their phone" case as well - you don't have access to the phone to reset the password and make a new backup. So, the only scope left is if you have your device in hand, in which case having the option to back stuff up to iCloud even if you lost the local backup password is pretty legitimate if you want to migrate devices. And useful even for resetting the said password: you back up to iCloud, reset your device to reset the password and then restore an iCloud backup. The only catch is that you'd need to buy some iCloud space from Apple, but a) they're gonna be happy to charge you for it, and b) it's quite cheap as the backup size is quite smaller than the amount of storage taken on your phone (my phone backup is 15 GB when 80 GB was used on the phone), and is a one-month purchase.