In any case, if you have a KBA recovery mechanism, then anyone who would go dig through their saved passwords to put into a phishing site will also just enter the recovery info into a phishing site and enroll an attacker's passkey.
In Sweden no bank has used passwords online.. ever I think? It has always been 2-factor of some kind.
For me it was always some kind of PIN - and then they built their own proprietary second factors which is also a bit insane imo
The important point here is that there is no way for you to have your browser sign an arbitrary (e.g. an attacker's) challenge, since you can't input the challenge at all.
This makes WebAuthN strictly better than static passwords, TOTPs (which are "unidirectional" in nature), and even "enter code 123456 into your authentication device and provide the code it displays"-like flows (which is a bidirectional challenge-response, but a MITMable one).
But also, in the end the attacker site isn't really getting anything that would let them then turn around and authorize as you.
Think of it like SSH keys. A public key and a private key. The site holds the public key, you have the private key. When you create a new passkey with the new site, they're holding your public key. They can't go turn around and start logging into to other places with your public key, they can't sign the challenges. So if you make a passkey for bank.com and an attacker at baank.com had you enroll a key there, they can't take the public key at baank.com and use it anywhere to act as you. They only have a public key, and one tied to baank.com at that.
In the end you never actually transmit your actual credential even in the original setup. You're just signing things, the private key stays on your device. And its a different key for every service.