I 'd also like to add another scenario in which this feature is important.
I use a double-blind password system on my password manager, in which I let bitwarden remember and generate the first half of the password, while I use my own, simpler and easy to remember password after it. This is to prevent someone from accessing my true passwords even if they somehow compromise bitwarden.
The problem with password history is that if I accidentally saved my password along with my double blind, even if I change what bitwarden will autofill, it will still remember that double blind. This causes a potential weakness in my password management system, as my password manager now knows my secret other half.