You should remediate the password. That option is used to sync password that were changed directly on component product managed by SDDC manager. https://docs.vmware.com/en/VMware-Cloud-Foundation/5.0/vcf-admin/GUID-92E16E2F-9053-4BBA-9BF9-7B5065C680CF.html According to the VMware Cloud Foundation documentation1, if you change the password of a service directly on the service node, you must remediate the password in SDDC Manager to update the password in the SDDC Manager database. This ensures that SDDC Manager can continue to manage the service and perform operations such as patching and upgrading. To remediate the password, you need to select the service from the Password Rotation page, click Remediate, and enter the new password.
Manually changing the password in SDDC Manager using the "Update" button is not a valid option, because there is no such button on the Password Rotation page. The only buttons available are Rotate Now, Schedule Rotation, and Remediate1 Scheduling the password rotation in SDDC Manager in the next five minutes using the "Schedule Rotation" button is not a recommended option, because it will change the password again and may cause service disruption. The Schedule Rotation button allows you to set a date and time for rotating the passwords of one or more services automatically1 Rotating the password in SDDC Manager using the "Rotate Now" button is also not a recommended option, because it will change the password again and may cause service disruption. The Rotate Now button allows you to rotate the passwords of one or more services immediately1