How is Windows Hello Sign-In with a PIN, More Secure Than a Password?

Windows Version: 22H2.

I've switched to Windows Hello Sign-In with a PIN. I was pleased to see when I tried to enter in my master password in KeepassXC, Windows prompted me to enter my PIN again. I thought "great I now have a sort of 2FA when it comes to unlocking my password vault in KeepassXC. Then on a whim, I tried hitting cancel when the Windows PIN dialog came up one day. After hitting cancel, my password file was simply unlocked like I had never enabled Windows Hello to begin with.

Microsoft promotes Windows Hello as a more secure sign-in/authentication method than a simple password. But is it really more secure? I was able to simply bypass the Hello dialog to get in to my password vault in KeepassXC. This reminds me of the Win98/95 days where you'd get a user/password prompt when booting your machine. But, you could simply hit cancel and the desktop would come up.

I believe the PIN has to be entered on your keyboard, it can't be used remotely. This makes it secure. Optionally you can include letters, numbers and special characters up to 127.

Thanks that makes sense.

How is a PIN different from (and better than) a password? On the surface, a PIN looks much like a password. A PIN can be a set of numbers, but enterprise policy might allow complex PINs that include special characters and letters, both upper-case and lower-case. Something like t758A! could be an account password or a complex Hello PIN. It isn't the structure of a PIN (length, complexity) that makes it better than a password, it's how it works.

• PIN is tied to the device
  One important difference between a password and a Hello PIN is that the PIN is tied to the specific device on which it was set up. That PIN is useless to anyone without that specific hardware. Someone who steals your password can sign in to your account from anywhere, but if they steal your PIN, they'd have to steal your physical device too!
  
  Even you can't use that PIN anywhere except on that specific device. If you want to sign in on multiple devices, you have to set up Hello on each device.
• PIN is local to the device
  A password is transmitted to the server -- it can be intercepted in transmission or stolen from a server. A PIN is local to the device -- it isn't transmitted anywhere and it isn't stored on the server. When the PIN is created, it establishes a trusted relationship with the identity provider and creates an asymmetric key pair that is used for authentication. When you enter your PIN, it unlocks the authentication key and uses the key to sign the request that is sent to the authenticating server.
• PIN is backed by hardware
  The Hello PIN is backed by a Trusted Platform Module (TPM) chip, which is a secure crypto-processor that is designed to carry out cryptographic operations. The chip includes multiple physical security mechanisms to make it tamper resistant, and malicious software is unable to tamper with the security functions of the TPM. All Windows 10 Mobile phones and many modern laptops have TPM.
  
  User key material is generated and available within the Trusted Platform Module (TPM) of the user device, which protects it from attackers who want to capture the key material and reuse it. Because Hello uses asymmetric key pairs, users credentials can't be stolen in cases where the identity provider or websites the user accesses have been compromised.
  
  The TPM protects against a variety of known and potential attacks, including PIN brute-force attacks. After too many incorrect guesses, the device is locked.
• PIN can be complex
  The Windows Hello for Business PIN is subject to the same set of IT management policies as a password, such as complexity, length, expiration, and history. Although we generally think of a PIN as a simple four-digit code, administrators can set policies for managed devices to require a PIN complexity similar to a password. You can require or block: special characters, uppercase characters, lowercase characters, and digits.
• What if someone steals the laptop or phone?
  To compromise a Windows Hello credential that TPM protects, an attacker must have access to the physical device, and then must find a way to spoof the user's biometrics or guess his or her PIN—and all of this must be done before TPM anti-hammering protection locks the device. You can provide additional protection for laptops that don't have TPM by enabling BitLocker and setting a policy to limit failed sign-ins.
• Why do you need a PIN to use biometrics?
  Windows Hello enables biometric sign-in for Windows 11: fingerprint, iris, or facial recognition. When you set up Windows Hello, you're asked to create a PIN first. This PIN enables you to sign in using the PIN when you can't use your preferred biometric because of an injury or because the sensor is unavailable or not working properly.
  
  If you only had a biometric sign-in configured and, for any reason, were unable to use that method to sign in, you would have to sign in using your account and password, which doesn't provide you the same level of protection as Hello.

Hi,
What really matters is if you use hello... you'll still be asked for your password/ security questions/.... eventually
So hello to now remembering more information than just password/ security questions lol

By the way you can also be safer simply by disabling remote access completely

Once someone has physical possession, they don't need the pin to access your hard drive. Drive can be removed and browsed from another computer.
And perhaps another type of OS if needed to view files.

And a new or wiped drive frees the device to be used again.

I do use PIN on my PC's mainly for convenience, and I use the same PIN on all 6 of them.
All PC I have at home.

The real question in my opinion is: why would keepass xc even ask for this PIN? Did you configure XC to use windows hello in addition to the password (is that even configurable)? If it is, the PIN entry should be mandatory.
About the question as gathered from the title of this thread: a PIN is a small key to a big secret (TPM based) behind it.