As you found, Firefox Accounts derives the encryption key from your username and password on the client-side; the server is never aware of your password. That encryption key protects your data on your device using AES-256-GCM, and is stored in its security enclave behind Touch ID or Face ID wherever possible.
It would be fantastic to have a 'more details' page, where the nitty-gritty is detailed for those who care.
An oversight on Mozilla’s part for security-types and engineers, but maybe they have the masses in mind with this tool & it’s marketing site.
It's probably way to late to make any difference here, but I still wish mozilla could push the boundaries here.
This is LastPass's page:
https://lastpass.com/support.php?cmd=showfaq&id=1096
But that too you won't find when you use the app/extension normally.
1) HOW is the key derived (say, "derived used PBKDF2 on the Firefox username + password")
2) WHERE is it encrypted (I assume "encrypted on the device/end-to-end/zero-knowledge"). It needs to be clear what the attack vectors are.
3) HOW is the secret managed (say, "Secret is wiped on all application switches")
and probably more that I forgot.
Using the app, the first thing I noticed is that I have a LOT of duplicate entries but no obvious way to clean that up.
EDIT: I see most of these details are on https://blog.mozilla.org/services/2014/04/30/firefox-syncs-n... but it doesn't change my disappointment in the totally useless "256-bit encryption" statement. Just say "strong encryption practices" and provide a link to the details. 8,192 bit encryption doesn't help you if you don't manage the key well.