The PIN method is really useful!
Passwords are used to authenticate against a directory, which generates some amount of network traffic that can be sniffed. They also are stored in a database, that... regardless of if that database is Active Directory or the Security Account Manager, isn't salted.
Which makes them relatively easily obtained AND they are useful for remote connectivity to a given device, or multiple devices depending on context.
Windows Hello using PIN however, changes this game. The PIN is an authorization token that unlocks the TPM, the TPM has the "password" in it, and it only communicates using PKI. The PIN is therefore only valid on the physical device that it's used on, and cannot be used for remote access of any kind. This means a PIN login is technically two factor, something you have the TPM module in the machine in question, something you know, the PIN itself.
The authentication process above happens within the mainboard's circuitry entirely, there's nothing put on any network anywhere anytime.
It's almost as secure as the FIDO2 key process, uses the exact same methodology, it just doesn't put the key into the user's hands as a dedicated device.
However, the criticism they generate poor behavior on the part of users is valid. BOTH Windows Hello and FIDO2 authentication processes rely on admins to act as a trust root to provide access. End users will forget passwords, they will forget PINs, they will forget everything. And if they setup a personal Windows device and forget their creds, they lose everything.
I used to worry about that... I do not anymore. It's 2023, if you cannot keep track of a login that has your junk in it, you don't deserve to use a computer. I'm sorry, but that's life. Find another way to live it! The old methods just get hacked, and far too many people have sued Microsoft and other large tech firms over their own incompetence... and WON.
@timeshifter No... you can't. Same deal for an Android device. They're functionally USELESS without that account, and WORSE they don't get the security updates. Which in the case of iPhone negates one of the primary advantages of using an Apple mobile device! Yes, it's technically possible but you're better off getting a flip phone if that's your intention.