If you, the user, are experiencing friction in a place where you're expecting there to be no friction then, indeed, there is room for improvement for the UX.
The "why is this" part is impossible to assess from the outside. Generally though: products are developed with certain constraints. A designer may come up with the perfect UX, only for a developer to come back and say "actually we can't do that", or for someone from the legal team to come back to say "you must change that".
Having to sign into the Clock app separately is somewhat ridiculous of course, and not having the comfort of the browser's password manager in this case isn't helpful either. However, there may be some serious anti-trust concerns and/or privacy concerns combined with that which prevent this. Microsoft already is in a position where its approach of included software is subject to new regulation.
It of course also has 500 other possible reasons - maybe the layoffs affected things, maybe there's general incompetency afoot, maybe it will get updated tomorrow, maybe it's something else still.
Bonus question: Is there also no way to sync settings like credentials in Windows without 3rd party tools?
There is, Windows 11 can sync OneDrive folders, apps installed from the Microsoft store, and preferences such as passwords and language.