@vamshikk Welcome to the forum!
This behavior is in fact not a bug, but a feature that was implemented by popular demand (as explained here and here). As @DenBesten explained, if your wish is for Bitwarden to undo this 3-year old feature, then you should express your support in the relevant feature request thread.
However, I am curious about why would you be entering a login password into some web form while Bitwarden is locked, instead of just unlocking Bitwarden and allowing Bitwarden to autofill the password into the login form (which is the main benefit of using the browser extension to begin with). If there is some legitimate reason for logging in to a website manually instead of using Bitwarden, then you could disable the password save prompt simply by adding the website domain to the Excluded Domains list (under Settings > Notifications).