I actually think this is the case. I could be completely wrong but I swear I saw the same question like 6 years ago in another forum software that looks exactly like this one lol. And people compalined about it storing plain text, but the response when asking the forum people was that it was only during that password creation, it’s not actually stored.
I don’t know if it’s crazy for me to think it’s the same forum from that many years ago, still doing the same thing and getting the same question.