Migration Assistant question(s)

I think you are talking about a security code instead of a secure password. It's asked only once. Read this manual on how to use Migration Assistant https://support.apple.com/en-us/HT204350

If you are using Migration Assistent, you don't have to start a new keychain. https://support.apple.com/guide/keychain-access/copy-keychains-kyca1121/mac

Also, if you use iCloud Keychain, your keychain will be synchronized when logging in with your AppleID on your new Mac.

You are being asked to select a password for that user on the new machine. You can choose the same that was in effect on the old one, or a new password. Just make sure not to forget it :-)

When you do the migration, save yourself possible troubles by migrating only the user accounts.

Do not migrate applications, settings, or other files.

You do not want to bring back old stuff like system extensions and old versions of applications that may not work correctly on the new mac and OS.

It is so easy today to install most applications from the App Store or the developers' websites, anyway.

You will get a clean system with all your documents, images, mail, etc.

I have no idea.

I believe that in previous versions the passwords just carried along when we migrated the accounts.

I am not sure if this is new in Catalina, or maybe Mojave.

It could be that this has to do with how passwords are handled with the new machines with the T2 chip.

I did a migration recently, to bring one account to a 2014 mac running Catalina, and it asked for the password, just like you, so I know it is not a behavior specific to T2 machines, but it may have been a change influenced by it.

There is no problem. Just type the passwords of your choice.

I did not experience any issues, AFAICR.