The previous comments were referring to the famous and really hilarious Mel Brooks movie "Spaceballs", this scene in particular:
https://www.macrumors.com/2022/12/02/lastpass-hacked-second-...
I take your point but I'm not aware of any hack of a major provider which resulted in exfiltration of decrypted customer secrets. Providers often enumerate how they prevent exactly this scenario [1][2], but you'd be correct that if your endpoint were compromised, it's probably game over. To be fair in this scenario just typing in your password (not using a manager) would also be game over.
If you want other options, it is possible to self-host (i.e. Vaultwarden). Personally I've been using 1Password for a long time, and their "Families" offering [3] is exceptional for me and has meaningfully improved my family security since the UX is easy enough my loved ones don't find a unique password per site "a chore".
[1] https://support.1password.com/1password-security/ [2] https://1passwordstatic.com/files/security/1password-white-p... [3] https://1password.com/families/
Anyway many legit reasons. Should it set off an alarm? Probably. Can you say before you do it? For sure!
Curious to know if Okta themselves were using best practices such as only using a hardware token as 2FA (FIDO2) and disabling SMS 2FA and recovery.