They're screwed, but that already happens. You have no idea how many people lose their phone or forget some password and just get a new phone/account, without trying to recover the old one.

Parents who lost their child's photos and are like oh well.

Assuming a normal user doesn't use the same password everywhere (which means everyone already knows their password), the alternative is saving them. Lost password or lost passkey doesn't make much difference.

Computing literacy is low so people will just suffer the consequences.