Thanks for the feedback @core (and the publicity), I have implemented some of the thoughtful items proposed in your post.
Password generation is now randomized and hidden from the user. (Advanced users can modify the markdown and change the passwords if they would like.) I also updated the OP with a screenshot and a description on how to access the button in the options menu.
I’m not going to make this change, I know iframe is a technical term, but in this case I don’t think changing it helps, I find it will be more confusing to use “inside post”. However… you can customize this label on your own instance, under Customize > Text, filtered by “bbb.modal”. Like in this screenshot:
