If the “New Passwords app” was never used before …
and Passwords is opened from the “New Backup” prompt …
then it may be easy for the user not to know which encryption key is missing (??). This was my thought at the successful outcome From pix8 to fp6 - #12 by Tagliaboschi.
My workflow on first use was to ensure “New Password” encryption was safe before proceeding. This would have involved detatching the phone from the Cloud and ensuring that both my PC and the phone could pass the Passwords encryption stage before opening Backup.