Generated password is on a breach list

I was going through changing some passwords that haven't been changed for a while and one of the sites I changed using 1password came back on a different password manager with the message

This Login's password is compromised!
This password was found to be on a list of known breached credentials. We strongly suggest that you change it.

Has anyone else seen this? What are the chances that a randomly generated password by a password manager (like 1password) has already been found in breached credential data. It certainly isn't zero.  I have 2FA on the account too, but I was thinking using passwords are like playing Wack-a-mole.  Some of my sites won't take passwords longer than 12-16 characters and are certainly not sophisticated enough to use passkeys.

Alan