The Password Server has the ability to create stand alone passwords for user access if 2FA is not enabled.
Note: For information on how to enable 2FA access please see this Article.
The User Password Policy is determined by the Password Server's Default Password Policy.
This Default policy can be be accessed in Password Server > Admin > General Settings > Default Password Policy
As you can see you have several options to strengthen your users passwords, as well the defaults for passwords created in Vaults.
How to configure the use of Passwords in place of 2FA
You can assign your users passwords and not require 2FA so long as you have not enabled the following.
Password Server > Users > Requires two-factor authentication to login.
Password Server > Admin > General Settings > AuthAnvil Two Factor Auth Settings - "Require all users to sign in with an AuthAnvil strong two-factor authentication credential, or use Single Sign-On".