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The problem is completely resolved with your solution. Thank you again!

Here is a screenshot (using Chromium browser) to illustrate the situation. Screenshot

Thank you @imath for your response.
Yes, I am injecting wp_login_form() from functions.php as a menu item.

Meanwhile I found a workaround by renaming the /wp-includes/js/zxcvbn.min.js file. This stops the auto-generation of passwords. I noticed though that if someone uses a weak password to login the the signup form shows a warning: “Confirm use…[Read more]