Unfortunately I use Advanced Data Protection on my Apple account so I kind a need that passcode. And moving to having completely different Apple account for development is PITA.
But I think connecting a device that can be used as authentication method without choosing a defense would negate the purpose of advanced data protection of your account and other devices.
Let's say I'm not super heavy Apple service user. For me Advanced Data Protection is defence against Apple itself and ability to keep little information I share via iCloud somewhat secret: mostly another backup of some photos and few other things.
It's not like I'm trying to defend against some state actors or whatver.