I’d rather have them show the passwords with a "show" button so the browser doesn’t give the user an idea of a fake security, because the other option would be

I’d rather have them show the passwords with a "show" button so the browser doesn’t give the user an idea of a fake security, because the other option would be a pseudo encryption. Most people would think it’s safe while actually someone with a little bit of knowledge could download a tool or even a browser extension which would just dump all stored passwords..