There are two places in Bitwarden settings that reference passkey:
Under Security->Master password-> login with passkey
Under Security->Two Step Login->passkey
The 2nd one is really a misuse of the term passkey since passkeys are intended to remove the need for a password. The 2nd option is using the security key in the older, 2FA mode.
I think this misuse of the name passkey is confusing, especially for users trying to migrate away from password+2FA to passkeys. I believe it is inconsistent with the fido alliance standards, and common usage I’ve seen on other web pages.
Better names for the 2nd case might be Hardware 2FA, FIDO 2FA, FIDO security key, or the like.