The ciphertext is not the plaintext (obviously). So an encrypted password is not a password. An encrypted password is a string resulting from the application of

The ciphertext is not the plaintext (obviously). So an encrypted password is not a password. An encrypted password is a string resulting from the application of an encryption algorithm and a key to a password. Uploading that string is not uploading the password. The fact that Apple's software can access the keys stored on the device to decrypt the password after you securely authenticate is neither here nor there.