That's not true. Passwords in Authy are for backup, which is optional. Backup synchronizes offline TOTP secrets between paired devices. Only the offline TOTP secret is encrypted; the token name is not.
"Authy Account" secrets, the ones created by the Authy API, used by Coinbase, Cloudflare, et cetera, are always stored remotely, and can be restored without-password to anyone with possession of your phone number and email account.
I wrote about this a little over here: