Yes, with autogenerated passwords you want to be extra-sure the machine has actually remembered them and the process breaks down sometimes. This is a good (if unexpected, should be advertised) feature and I can't see security implications.
I think security implications here would mostly apply to cases where you wanted to create multiple accounts on the same website within a short period.
If I’m clicking a “Generate password” button I expected a new password every time. But here it’s an autocomplete-like dropdown rather than an action. By your definition, such dropdown would show different passwords for different fields, even if the second field is a “confirm password” field.