This bug has been around for quite a while and has been annoyingly persistent. I just figured out what triggered it.
I often use a password for my security questions and I think this was a precipitating event.
Two things don't happen because you've done Step 3. You don't get a new "Label/new field" entry and you don't get the gear for the password field. Similar thing happens with the One-Time Password. Work around is to type something in the "new field" and hit tab.
1Password Version: 1Password 7 Version 7.1.2 (70102000)
Extension Version: Not Provided
OS Version: 10.13.6 (17G65)
Sync Type: Family