Realistically speaking, MFA most importantly is to get away from the “something you know” factor since that is generally more vulnerable. Even if it is a single factor, it’s a better factor.
Also enables people to meaningfully have multiple factors if they choose. The password managers generally require a master passphrase and/or unlocking through something like “Windows Hello”
I think there’s a lot of distraction discussing the particulars of this hypothetical, when it’s clear that it couldn’t work that way in practice.
It’s really only helpful to illustrate the equity imbalance and just how much equity is in the system that most people don’t see.