Here is a workflow:
1) Download keypass.
2) generate random password (however you do that...)
3) copy password into web form.
4) copy passwords into keypass and save.
for logging in:
1) open keypass
2) copy password
3) paste into webform.
Typing the passwords leaves room for errors. Truly random passwords are copied and pasted. Words are typed.
???
Passwords can be simple copy/pasted from.
Encrypted files can be simply copy/pasted from.
It's also the case that disabling paste doesn't do anything to stop a user from storing their passwords in an unencrypted file.
Whether you want to call it a "security flaw" is not obviously an important question.
It could be a security flaw because you discourage using passwords that are truly randomly generated.
Wouldn't using a random password and copy/pasting it imply they are storing it somewhere unsafe?
Edited: you were probably downvoted for using scare quotes.