That looks cumbersome enough to sound like you guys are trying to discourage the method entirely. A custom password that has to be copied and pasted every time? A lot fewer people will put up with that for long enough, and I'm sure whoever came up with that and whoever approved it, they all know this.
If you’re looking to connect via SSH, we do have a workaround here: https://github.com/microsoft/vscode-dev-containers/blob/main... -- and I use this regularly for Jupyter Notebooks.