@GossiTheDog @faebudo I'd still argue that this is the same for any synced Password managers and has virtually nothing to do with the Passkeys. If Apple implements their own SSH Key Manager, this doesn't make SSH Keys a bad authentication system.
Regardless, I tried looking into this and I cannot find any source that this actually works. AFAIK you can download the encrypted wallet and effectively bypass LoginAuthToken in the above scheme using SMS, but you still need to somehow decrypt the sk, which is encrypted using a key derived from a password. I don't see how this works with SMS reset and didn't manage to make it work either.