password revealed before changed into bullets

That’s the way that password prompting input has long worked on Apple systems; on macOS, iOS, and iPadOS.

That lets you see what you’ve pressed has correctly registered, and lets you see if caps-lock was set, too.

Security concerns?

Do you have two-factor authentication enabled? Turn that on.

Are your Apple ID password recovery questions and trusted telephone number correct and current?. Check that.

Do you have a robust password? Learn what a robust password is.

Do you have FileVault storage encryption enabled? Enable that, if not.

Do you have automatic backups enabled, and operating? Those backups are a key part of your security.

(Preferably also with Wi-Fi-connected remote storage for your backups, with a laptop.)

A hacker that goes to the programming and testing effort of just briefly showing one letter at a time and just in a password field would be more an artist than a miscreant.

Here’s an old discussion of exactly this behavior:

https://forums.imore.com/ask-question/279527-hide-characters-when-typing-password.html

If you should allow Keychain to auto-fill and enter the password, then the password won’t show. Which will work for all but a few of the password prompts. As mentioned in the above-linked forum thread, blank the screen if you need enter a password on a shared screen connection or where you have shoulder surfers around. (They could also choose to video record your finger motion, if they were so inclined.)

Apple provides no means to disable this brief single-character display.

Log some feedback with our hosts at Apple, if you want that blanking feature: Product Feedback - Apple

You are welcome. It is normal when manually typing in a password. As mentioned, when keychain fills in the password, that doesn't happen.

I see the same thing some times, depending on where I am signing in.

It sounds to me like it was a scam!

Did you provide any potentially damaging information to anyone? If yes, you'll need to follow up, for example, with a credit card company, Apple, Social Security, your bank, etc.

If you gave you Apple ID password to a scammer, then

Change your Apple ID password https://support.apple.com/en-us/HT201355

Here is What to do after you change your Apple ID or password https://support.apple.com/en-us/HT204071

Learn about Phishing, Scams, Apple Practices,etc.

 See If you see apple.com/bill, itunes.com/bill, or an unfamiliar charge on your statement https://support.apple.com/en-us/HT201382

See Identify legitimate emails from the App Store or iTunes Store https://support.apple.com/en-us/HT201679

See How to avoid scams when using Apple Pay to send and receive money https://support.apple.com/en-us/HT208226

For scam related information from Apple including reporting scams to Apple see Avoid phishing emails, fake 'virus' alerts, phony support calls, and other scams https://support.apple.com/en-us/HT204759

Identify scams related to purported apple notifications--Eric Root.

“Apple will always address you by your name or the name they have on file for you, not Dear Customer, Dear Client or by using your e-mail address. The e-mail will be from @apple.com or @iTunes.com. E-mail addresses can be spoofed. You can go to Mail/View/Message/Show all Headers to see more. Apple emails won't have poor grammar/misspellings. Apple e-mails will never contain an attachment. Apple will never request personal information by email such as Social Security numbers, your Mother’s maiden name or full credit card numbers. … 

“The only exception to the above I have noticed is if you order something from the Apple Store (apple.com), your receipt will be addressed to Dear Apple Customer. That is a receipt for a purchase you initiated.”

Learn about/Increase security

See If you think your Apple ID has been compromised https://support.apple.com/en-us/HT204145

Increase the Security of your Apple ID https://support.apple.com/en-us/HT201303

iCloud security overview  https://support.apple.com/en-us/HT202303

Ways to keep your information safe on Mac https://support.apple.com/en-gb/guide/mac-help/mh11402/mac

UseTwo-factor authentication for Apple ID https://support.apple.com/en-us/HT204915