This is much, much simpler than you think it is. Passkeys are just passwords that require a password manager.
The issue isn't what passkeys _are_ (e.g. explaining they are like public/private "ssh keys" and hoping that type of explanation ends the confusion).
Instead, it's the workflow around passkeys. The websites show very confusing dialog popups and choices that a lot of normal people will not understand. This is a good article with screenshots showing the confusion: https://arstechnica.com/security/2024/12/passkey-technology-...
I have senior citizens asking me about passkeys because their bank and medical websites keep reminding them about switching to passkeys every time they login into their accounts. My recommendation to them is not to do it unless they have a simplistic single vendor setup such as only Apple iPhone and MacBook with iCloud Passwords app. If instead they have a mixed Windows + Apple setup with 3rd-party password manager, they could accidentally put a new passkey into the os or browser instead of their external password manager and not realize what has happened. This happens because the different parties implementing passkeys all have different agendas that suits their interests and that's what makes the workflow confusing for normal people.