Facebook is huge and has very diverse teams/departments. It's absolutely possible the guys who know what security is, and the guys who build app xyz are in different departments, countries, continents.

The capitalists want us to believe otherwise, but large corporations are just as convoluted and inefficient as a planned economy.

Considering how old Facebook is…. They probably never bothered to upgrade the authentication system because “if it ain’t broke, don’t fix it” and it didn’t matter to their revenue.

They are still on the old system of writing them down on paper XD

I mentioned this in another comment too: Nobody seems to reads the actual posts, just the headlines. They were accidentally stored in logs:

As part of a security review in 2019, we found that a subset of FB users' passwords were temporarily logged in a readable format within our internal data systems,

which is something I've seen at other companies too. For example, if you have error logging that logs the entire HTTP request when an error happens, but forget to filter out sensitive fields.

It seems like it was one of those old systems from the earlier days that somehow was overlooked. It's not great but I understand how it happens if they didn't have strong monitoring and system ownership.

This is almost certainly the result of accidentally letting the passwords get into the logging infrastructure.

These things are the other way around. The older something is, the more likely it is to find a bunch of questionable choices, spaghetti code, and security holes.

The questions I have surround the "since 2012" bit. FB exists since 2004, so what happened in 2012? Was it a data dump, a careless logger, system migration, or something else?