Although renting virtual resources on shared hardware can be convenient (much easier to provision virtual resources than real servers), there are a couple of drawbacks. Most importantly, particularly from a password management perspective, running on shared hardware could expose your virtual resources to hardware exploits like the row hammer effect.
Mistakes happen in the most secure systems. The more layers of defense you have, the less likely a mistake causes an incident.
Applied to this particular context, the colloquial interpretation doesn't make any sense whereas the technical interpretation does.
https://www.merriam-webster.com/dictionary/cloud%20computing
I look at the cloud as something I can spin up a new service or VM very quickly. Think AWS, or Azure or whatever other service lets you quickly and easily deploy something.
We've now gotten to the point where people are saying any computer on the internet is "the cloud" and I don't think that's right or wrong necessarily, but for the sake of Hacker News, I do wish we were a little more specific.
That said, I think this argument from Proton is bordering on funny word play to make it seem different.
I don't feel like my passwords should be stored "somewhere, not here". They should be stored "here" - where I choose to store them, and nowhere else.
I purchased a hardware password manager a while back, which seemed really neat:
But, sure enough, bulk import uploads all of your passwords to their servers, even though there's just no rational reason why a server "somewhere, not here" needs to play man-in-the-middle to all your logins. To avoid it, you have to go one by one (even then there's no assurance, but the official docs do not say it's sent up to their servers).
If you read "cloud" as "somebody else's computer" it entirely depends on perspective.
If you're running a service on your own hardware in your own datacenter, you're clearly not cloud.
However, if you're a user of that same service, and your data lives on some computers that are running in someone else's data center, then for all intents and purposes your data is "in the cloud". It's indistinguishable if the service you're using is using AWS/Azure/etc, running their own hardware, and/or storing data on something like S3.
There's of course a mix of in between stuff that makes this 10x more complicated: if it's a rented server in somebody else's datacenter, are you "cloud" or not? What if it's your hardware, but somebody else's datacenter? What if you store backups on S3?