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So many people have given feedback that they don't feel comfortable inputting passwords into third party apps. OAuth is a bit more secure in that manner and when it's properly fleshed out it will allow for different permissions.

Interesting! I mean, technically one is not more secure than the other afaik. Could even argue that app passwords are stronger because they are unique for each app. But if it holds back people from signing it, it's a good reason to switch!

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I'd argue that it's slightly more secure in that the app developer can't use / know your password to login to bluesky. App passwords are not app specific, they can be used to login to any app supporting bluesky accounts.