I quote myself from a different comment:
I just needed to think of the scene from the Simpsons, where Mr. Burns and Smithers go all through the security checks and in the end, there is a flimsy open backdoor, where a stray dog entered the room. All security in the front doesn't matter, if the backdoor is not secure at all and until the backdoor is that unsecure, I'm not willing to add money and time, to make the front door more secure.
The phone argument lacks a bit. Accessing the TOTP App and the password manager do require a separate authentification, to get encrypted. Sure if they snatch my phone away, when its fully unlocked, including my password manager, they have access for a limited time. They need to be fast enough, until I can remotly lock it or until it automatically locks itself. Android phones can now detect when they are stolen. Either by the movement or when it goes offline. The latter I tested and it's not instant, but you still don't have long.
I don't think about potential backdoors. If there is no known backdoor, then I deem it save. Sure they also could me to unlock the phone. This would be xkcd 538. And this applies to any security.
Adding more security and inconvenience doesn't make sense to me, so long the backend is shit. So far a few big companies did screw up hard in their backend and dozens of smaller sites do some bad stuff, that it doesn't really matter how strong your login is. Here I reference back to my quote.
In a closed system, like a company, this added security makes sense, as they usually control the backend as well. If my CEO would send me a text request to reset his logins, I would call him or walk to his office, and ask him directly. Sure with AI, they could impersonate his voice but I don't think they can impersonate his way to speak.
Of course everything can be hacked. When I think something is compromised, then I need to change everything. So far I didn't heard of any remote zero click compromise. With the fancy hacking tools of some companies, its not publicly known how they gained access. I suspect either physical access or some malware. But we are speaking on a high level of hacking, that most people don't need to be scared off. At that level, there are other things to worry about.
When we just look at the dangers an average person might encounter, this level of security is fine. I do had accounts compromised and I can exactly tell what my mistake was. One was sharing my password with someone else and not knowing how secure his devices where and not having 2FA. The second one was that I used the same password everywhere. At this point I was switching to generated passwords and still didn't had every account changed (the unimportant ones).
Of course Passkeys are by nature a more secure implementation, as you are unable to save plaintext passwords but there is one thing that this can't solve and that's being that they remove and reset your auth, without verifying your identity. Hackers still can steal session tokens and sites don't need to require additional authentification, when altering your authentification.