I think you're assuming that the algorithm must be reversible, but I don't see why. For example, hash(site|strong_master_password) isn't reversible under reasonable assumptions.

If the algorithm is not reversible, "one password is compromised, they all are" isn't true. Only if the master password is compromised, then all your passwords are (but this is exactly the same with any password manager.)

The one thing that personally I don't like about vaults is availability of my passwords. You need your password manager (i.e. the app) to get your passwords. I've had multiple situations, typically when traveling, where I didn't have access to my devices, and thus I didn't have the app.