In the admin settings of Nextcloud is a section called “Passwords” where you can enable or disable the old api. If you haven’t changed this setting, it is probably still the original value.
The settings of the extension can be found by clicking the gear icon in the popup window. I would recommend to use a device password which you can create at the end of the security section of your personal Nextcloud settings.
What you can also do to check this issue is to open ‘about:debugging’ in firefox, the search for the passwords extension and then click “Debug”. Open the Network tab of the developer tools and then open the extension and click the sync icon in the top right corner. Check what happens.