It should be a big red flag for sure, but the reality is most users aren't going to understand that. They got told to use a password manager by someone or find it convenient, but they don't understand the security flow enough to catch that it's a potential attack, or how to resolve it safely.

Historically I've seen lots of sites do a subdomain shuffle for login pages every now and then which routinely breaks domain matching, introducing false positives that users have to deal with, making them numb to the threat too. Passkeys baking in the domain check with no workaround means that sites can't do that, which is a benefit.