No, it should work, have you tried it?
Obviously as your entering {{password}} as text into a password field it substitutes your entry with **** for privacy reasons. The big risk is that you don't see if you are making a typo, that is why I always wrote out the curly-braced enclosed property in a text editor e.g. {{password}}, and then did a copy and pasted that into the password field.
Cheers,
Danny