Also Chrome partially does not have this issue if you protect your phone with pin, password, pattern or fingerprint. If you go to chrome where you will see it, you can not know the password without using your device access code to access it. But one thing I disliked about the password manager is that it is online. The second thing I disliked about the Google password manager is that if you want to login on a website, the password and the username will autofill itself and if you click on show password icon on the website, you will see the password in plain text which makes what you posted to be partially true. I guess that it would also be on Safari like that. Or isn't it like that on Safari?
you can turn off the auto fill feature on the earliest version of chrome. Plus currently the passwords manager on chrome conceals all passwords even when you attempt the auto fill feature. The only time raw passwords are displayed is when you choose to by trying to view you passwords where chrome will ask for a mobile phone verification first probably a pin , password fingerprint or face id as the case may be.
The fact still remains those passwords are not 100% safe as an hacker getting hold of the Google account puts all the passwords at risk. Even if Google currently has the option to encrypt passwords.