Where is the password apple generated

See if the 'Manage your apps' section helps.

Sign in with Apple - Manage the apps you use with

My understanding is it does not generate an actual password. Apple’s system provides the app or site with a unique personal identifier verifying you are who you say you are and thus the app or site can create an account. But the app or site does not need or get a password with Sign In with Apple. You’ve authenticated your AppleID with Apple’s system, which in turn basically vouches for you to the app or site and your account gets set up with the unique personal identifier Apple provides the app or site.

But there is no secondary password authentication with the app or site. You’ve already authenticated you’re you with Apple, and that is sufficient for you to then access the app or site. The whole point is you only need the one password, your AppleID password with Apple (and thus can use FaceID or touchID as a proxy for your AppleID password with Apple). The app or site is then trusting Apple’s system that the legitimate user is accessing the account with them.