How to customise wake-up settings for MacBook Pro M2 Max and Apple Studio display

It's not 'eliminating the password' that would help with that. It's eliminating the automatic screen locking

Change Lock Screen settings on Mac - Apple Support

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My recommendation is to turn OFF "Require password after screen saver begins or display is turned off"

I don't think that refers to turning off an external display.

Then when you go out into the world, do not leave your MacBook Pro unattended, EVER. -OR-

...enable 'Fast User Switching', and when you need to step away from your Mac, begin the switch to another user, as described here:

Switch quickly between users on Mac - Apple Support

if, instead of literally choosing another User, you choose 'Login Window' off that menuBar icon list, it will hide your current windows and present a new login screen. Now your Mac is locked up tight. Even returning to your original User requires a password.

Require a password after waking your Mac - Apple Support

Explains how and when you can set this setting. You can adjust it before you move around.

Keep in mind these settings may not be able to be controlled if your Mac is under a school/company control with a mobile device management utility. In such cases, or when you aren't the admin user of the computer, you'll need an admin account to allow such control

Not directly. Your best bet is to just remember to adjust the actual primary user login password and auto-login preferences as needed.

Only by totally removing the password from the primary user login will you avoid having any password to login from sleep when login from sleep settings are active.

This is not recommended unless your machine is always in a physically secure place.