But there's a difference in terms of strength of the encryption key, if you are planning to use the full password as input to Key Derivation Function (KDF). If you make public the first 5 letters of a 44 letter password, you've just made lost some of the entropy.
By the way, based on a comment in this thread, I added a SHA-256 stage. I now hash the full password, and sum the bytes of the hash to generate the check digits.
TLDR: "Without authentication, impersonation is feasible, ..."
For example, TLS 1.3 does this by (after performing ephemeral DH key exchange) signing the conversation transcript with the server's long term identity key. After this the client is sure that they are speaking to the correct server, but the server has no authenticity guarantees about the client.