What you’re describing would be a completely unusable terminal. You’d lose things as basic as the backspace key. And what’s wrong with Terminal.app indicating when it’s suppressing output?
The ssh command switches the terminal into no-echo mode with termios flags.
Terminal.app, being clever, watches for disabled echo (among other things) and assumes a password is being entered and displays the key icon and enables Secure Event Input.
I don't want Terminal.app to be clever.