The generated password is usually just random string and hard to memorise. If you need to use the password outside of the web, e.g. on telephone or in a physical office, then it makes sense to use a password you creates. This is similar to the "master password" used by password manager, you should remember it by heart instead of generating a random one.
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I do not understand why a government service would require this. Governments should improve security, not undermine it.
(Then again, most governments don't seem to care much about what I think they should be doing.)
The generated password is usually just random string and hard to memorise. If you need to use the password outside of the web, e.g. on telephone or in a physical office, then it makes sense to use a password you creates. This is similar to the "master password" used by password manager, you should remember it by heart instead of generating a random one.