In reply to Eshcole.

Eschcole -

I’m guessing this is more for questionable sites maybe?

Not exactly. This is a feature where the loop will not display the post and will only show a password entry field. It's not really for "questionable sites" as all of the other content is still viewable. It's just an option for users to make a post semi-private.

The reason I say semi-private is that a) the password is mean to be shared which is why the password is stored in clear text and the author can view/modify the password.

Despite the password it's not really a security feature and never was meant to be. As you've said there are better ways to make a site or portions of a site private using plugins.