What usually works is adding a character at the end of the autofilled password and then removing it

My old bank would not allow pasted passwords, nor autofill. For a while PayPal was the same way.

Security theater.
"Look, boss, i made thing more secure!"

From my experience, I think this also happens because of badly written code, where it tries to detect user input to do validation, but it handles events incorrectly and sees autofill as invalid.