If someone links me to "rnicrosoft.com" with a perfectly cloned login page, my eyes might not notice that it's a phishing link, but my browser extension will refuse to autofill, and that will cause me to notice.
Phishing is one of the most common attacks, and also one of the easiest to fall for, so I think using the browser extension is on-net more secure even though it does increase your attack surface some.
I know proper 2fa, like webauthn/fido/yubikeys, also solves this (though totp 2fa does not), but a lot of the sites I use do not support a security key. If all my sites supported webauthn, I think avoiding the browser extension would be defensible.
Sure there may be existence of typosquatting here and there but they tend to be much easier to spot vs the phising url using unicode variants.
If I ever need to fill the login, I just do any of these:
- KeepassXC has auto-type feature, so I just choose the needed one and let it auto-type - I enable the extension only when I need to log in and choose the one I need to fill (not auto-fill, but only fill when I click on the account from the extension pop-up dashboard).