e2e encryption is one forced update away from being plain text.
This is a personal belief based on chatting with Apple and Google employees. You don't have to agree.
Compared to using, say, KeepassXC with a unique, secure password per vault. Now you can sync on iCloud or google drive, but neither Google nor Apple can decrypt the vault; the keepassXC maintainers presumably could make a malicious update (which you'd still have to accept, since the updates aren't forced on you), but that would also affect the security of everyone using KeepassXC (and potentially be much more harmful to the economy and society as a whole than the government is willing to accept in order to get intel on an individual person of interest)
It's a know bug, but the fact that it still exists really shows how much the devs care about making it a really rock solid alternative. I've never had this issue with Google passwords, 1password or any other provider.
I've already been doing manual backups. In addition, there is a feature to make a copy of the database before writing that I've just turned on. And the "Use alternative saving method -> Directly write to database file (dangerous)" option is supposed to prevent this issue from happening with cloud storage.
I wasn't in any way arguing KeepassXC is a layperson-friendly way to manage authentication credentials, just that it gives you the most security from the big identity providers (Apple, Google) selling you out for political or selfish reasons.
Of course, there's probably only so much I can do here. Apple could presumable ship an update to their OS that allows them to access a user's database while it's unlocked, or to keylog the master password.
A yubikey might be the only thing that can really protect you here.
Have you chatted with the Apple and Google CEOs? How about with the future Apple and Google CEOs?