Are they still doing that? I hope not. This happened to me (ballooning battery, recall repair, asked me for my password) for a 2006 MBP (the 1st Intel version), so something like 10 years ago.

If they still need your password to repair your computer, they really need to update their procedures.

Back then I just winced, gave them my password, and crossed my fingers (seems to have worked out), but these days I just couldn't do that. There's all kinds of financial and identity stuff in there.

No, you don't have to give them your password for ballooning battery. You can short-circuit the discussion with the Apple rep by saying 'you can wipe it if you need to'.

Had mine replaced a couple months ago, they still wanted access. I'm pretty sure they gave a good reason,but I forgot. Probably just to run diagnostics. I made them an account. Still not ideal but I think they could just boot in single user mode and give themselves one if they wanted to.

I once took in a 15" MacBook Pro to get a SATA cable replaced (my own fault for rushing an SSD replacement and ripping the cable). While they didn't ask for my password, they did make me sign a document allowing them to wipe the drive if they felt like it. This is despite the actual service being purely hardware-related.

Sure enough, after a few days I get the laptop back to see the hard drive's been wiped, supposedly because there were errors with the OS installation, though there were none that I picked up actually using the device.

Not that it's possible with Apple devices anymore, but that taught me I should have just given them the laptop without the RAM or SSD installed at all.