In UNIX, /etc/passwd, was it? Maybe /etc/pwd? encrypts automatically.
(Sorry, I haven’t used UNIX in over 10 years...but I did use it quite a bit during the 1990’s and into the 2000’s).
It was /etc/passwd, and still is. And yes, the password has always been stored in a "hashed" format, with the old-style hash using a 56-bit DES encryption algorithm. But that was judged too easy to crack with modern techniques, and was replaced years ago by a variety of other more robust algorithms. Unix and Linux now store even the hashes in files that are unreadable by regular users (/etc/master.passwd, /etc/shadow).
I am unaware of any Unix (or Linux) system that stores passwords in plaintext, unless you go out of your way to specify that (I think openLDAP permits it but discourages it).
The jokers at Fakebook were either being monumentally stupid, or outright malicious. Your choice.