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Password can also very easily be stolen during phishing, while passkeys are phishing resistant.
And while a hardware passkeys can be stole and used, those who steal them will still need the pin to use them, and the two major hardware passkeys options now (Yubico and Token2) both have some pin brute force protection in their firmware to slow someone down long enough for an account to be secured another way.
As for passkeys on phones, they require the pin or biometric used to unlock the phones to be used.
"Difficult to recover from" was referencing setting all of your accounts back up. I should have also included "lost" and "broken" to make that more obvious. Many hardware (most? all?) passkeys do not allow for backup and restore.
But I do see an issue with stolen hardware passkeys being used for access too if they're a primary factor. With the mitigations you mentioned hopefully holding up.