When users update their passwords, the new credentials may be briefly held in the server database. While this doesn't grant the server any added capabilities—it already learns the users' passwords as part of the authentication process—it does disrupt the expectation that passwords won't be stored in the database. As a result, these passwords could inadvertently be captured in database backups for a longer duration.
These temporarily stored passwords are automatically erased after a 48-hour window.
https://github.com/matrix-org/synapse/pull/16272
This bug was due to a regression in https://github.com/matrix-org/synapse/pull/13188.