Thanks for following up with us @jdguilty.
While I can't speak to the design decisions for the Password item, I've personally seen a few scenarios where the option to convert the item has saved someone from recreating it as a Login. For example, in a situation where it would be helpful to autofill the password, using a Login item is a better fit. That said, I can understand why you'd want an item to stay the type you chose. I can't promise that this is behaviour we'll change, but I've shared your feedback with the team. Thanks again for including your use case on this.
If you'd like to create Password items with usernames, you can add a text field while editing the item (+ add more > Text), then enter the username there. You can also rename the text field as "username" or anything else. As long as the default username field is empty, the item will stay as a Password item.
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