iOS 26 - Unusual Unlock

Hope my post wasn't too confusing. I notice Recreation is really Re-creation.

TL;DR on my iPhone I can unlock 1Password with the Master Password, accessing the Master Password by tapping the icon and word 'Passwords' above the keyboard. The source of the Master Password is 1Password.

Question: if 1Password is locked, why does it deliver my Master Password to unlock itself?

This problem still exists.

1. Don't people often keep 1Password password and key in 1Password itself as an entry? I have done so for almost a decade. I remember reading about the risks years ago and I thought it was nil to do so.
2. Is it normal I can use 1Password in iOS to unlock 1Password that is locked? This seems nuts.

Sorry I did not see this reply.  No, there were/are no other AutoFill providers enabled on the device. The only provider is/was 1Password. Per what I described:

1. Close 1Password app in iOS (using app switcher flick up)
2. Lock the phone
3. Wait 10 sec, or can be more
4. Unlock phone
5. Re-open 1Password, let Face ID fail twice
6. Tap the key icon and word Passwords above the keyboard
7. Have 1Password, the only auto filler on the phone, fill out my 1Password password for me, even though it is locked, or at least should be

I can still replicate this most times. Letting Face ID fail twice allows the key icon and word "Password" above the keyboard to be pressed and for 1Password to suggest the very password to logon when locked out. 

Unlock with Face ID is ON, but Unlock with device passcode and device are OFF.

Auto-lock when device locks is ON but this is clearly not fully functioning and has not been since at minimum 6 months ago. The timing of point 3 is likely important, I have auto lock on exit set at 2 min and perhaps this, incorrectly, in somehow overriding "lock when device locks".

1Password app is locked when the phone is unlocked and 1Password is re-opened. Unless not clear from above the problem is the password to unlock is available via 1Password itself, which is very odd.