Having this available to every Apple user on the web is huge, especially when you look at the network benefits of the Apple feature pushing all of the slackers (hi, every large financial company!) to implement secure MFA.
Machinery to take that TOTP code and immediately plug it into the real bank (since it's time sensitive) exists already.
In contrast WebAuthn credentials are tied to the domain name of the site. Your iPhone doesn't have any credentials for https://fake-bank.example/ so it won't sign you in, and even if it did have credentials for fake-bank.example they'd be completely useless on the https://real-bank.example/ web site. There is no way to give real-bank credentials to fake-bank, it just can't work because the cryptographic material used is tied to the domain name.
Google deployed an earlier iteration of this same technology and reported zero phishing for accounts protected this way because it isn't possible to see how to phish it without some grave security bug somewhere. This is the penicillin of web user security, it's a night-and-day difference over what we had before.
This is making a friendly version of Yubikeys (using Apple devices) and password vaults for Apple users.
Just a happy 1Password user, nut related to them in any way.
In this case TOTP acts more like an insecure one-time session key.
Competition and a free market has perils. May the best solution win.
Big fan of these feature being native client side. These are features, not products. We should all be a fan of improved security delivered to as many people as possible, with as little effort on their part.