Missing shared passwords after logging out and back into iCloud on iPhone

I had cleared the cache and cookies on my chrome browser on my Windows 11 PC a while ago (I don't know if this is relevant or not). I've logged into my school Gmail many times today already, but for some reason when I went to log in tonight, it needed to verify me. I don't know why, like I said I logged in many times today already, but whatever. I verified with my iPhone, but then for a reason I still don't understand, I was prompted to change my Gmail password. Again, whatever... I pretty much only use iCloud Passwords. So, I go into iCloud Passwords on my phone (now its own app), I look up my school Gmail account and password. I update the password to a new one. This is where I ran into the first problem. The password in question did not update on the PC like it usually does. It'll spin for a second and download all the passwords again. This did not happen this time. No matter what I did it wouldn't update or sync. I have Passwords and Keychains in iCloud on the phone ON and 'Sync this iPhone was ON. I tried closing and restarting iCloud Passwords on the PC -no change. On the iPhone, I tried shutting off and back on the switch for "Sync this iPhone" -no change. Then I tried logging out of iCloud altogether on the phone. It asked me, would you like to keep copies of xy&z on this phone? Calendar, Contacts, Health, etc., and Passwords and Keychain? You bet your *** I selected to keep all data from Passwords and Keychain on the phone. Okay it logged out of iCloud on the phone. Now, I try to log back in. I'm prompted for my apple id and password. I open the Passwords app and there are now passwords missing! I don't know exactly how many, but it's somewhere around 20 passwords. I had something like 423 before, now I only have 402. I'm pretty sure it was all my 'shared' passwords, since I share a bunch with my wife and that number is around 20ish. All shared passwords are gone. Mind you, the passwords I share, are the most used and the most important passwords I have, INCLUDING MY APPLE ID AND PASSWORD... Luckily, I know the password by heart because I've had to change it so many times against my will, it was something like, "GODF&CKINGDAMNIT!543" or something like that. You can sense the rage from the last time I had to deal with something this stupid. Fortunately, my wife's phone had them all still and I was able to recover most if not all the missing passwords, but again I don't even know how many are actually missing. I'm just assuming it was all the shared ones. I know I could have restored my phone to a backup, but that would've been last resort.

So, what is going on here, Apple?

1. Why didn't Passwords (on PC) update (like it always did) when I changed a password on my phone? After trying multiple times, multiple ways to force it to update/sync?
2. Why did the shared passwords and possibly other passwords get deleted after logging out and back into iCloud, when specifically requesting to KEEP COPIES ON THE PHONE?

Seriously, what does "keep copies on my phone" mean? Keep everything except some? I've never had a problem with Keychain before, but this was ridiculous. A task that should've taken a couple seconds had me going down an iCloud rabbit-hole. I am now seriously invested in finding a new password manager, if not a new phone altogether. It had one job. Save my passwords. And it literally removed them. They weren't even in the deleted passwords folder. How can I trust something so important to something that makes such a colossal error.

[Edited by Moderator]

Original Title: Most important passwords gone after logging out of iCloud, keeping the copies on the phone, and logging back in.