Yes, it is a native iOS dialog and TikTok is not collecting your password, BUT when this report was discussed (and somehow flagged to death despite friendly comments), I did not see anyone mention the fact that the ACCELEROMETER - which TikTok has access to - can be used to discover your password even without direct input into the app.
The technique used here is >6 years old and was 70% accurate on the first try: https://www.techradar.com/news/scientists-find-a-way-to-crack-your-phones-password-using-just-the-accelerometer
Don’t dismiss this.