For Keychain also create passwords?

Your Mac can suggest a password anywhere a password is obviously being solicited, such as logging in to a web site. You click on the tiny 'key" icon provided, and it will provide a strong random password. Use it if you like, or modify it, or enter one of your own.

Any password, auto-generated or manually entered, can be saved in your keychain. These passwords are all protected by a password, initially your login password.