When going to:
1. Settings app
2. Wi-Fi
3. Tapping the Info button next to the Wi-Fi network and using Face ID or Touch ID to unlock the feature

Click To See Full Image.
After these steps are performed by the user it will reveal the password in plain text and it will allow users to copy and share it.
This is a
new feature added in iOS 16, and iPadOS 16.1. At this moment the OS does not allow to prevent Wi-Fi network passwords to be hidden, not even by the policy. We encourage opening a ticket or submitting feedback to Apple
here to look into this so it can be considered in the future.
KACE does not recommend using WPA2-PSK for iOS/iPadOS as this may result in a security vulnerability. It is recommended to use a WPA2-Enterprise network. More information about Managing Wi-Fi networks with KACE Cloud can be found
here.