“think they’re referring to the common method of keeping a spreadsheet or text file like so many do.”
Lol... raises hand. I keep my login info on a computer text. But you need to cut out a couple of characters in each login to get the correct info *and* if you need to find out what websites they’re for, you have to go through a folder on my desk (not the computer) and find the name of the website and match it to the number on the text file. It’s pretty easy once you get the hang of it, and I think pretty safe.
In the computer biz, that's a variation on a hashing function ;-)
For myself, I write my PINs on my credit and debit cards in binary with a bit shift and padded on the ends with my own binary bit sequence. Told a couple of CS PHDs that they could have everything in the account if they could figure it out in the number of tries allowed before the card locked itself out. Mathematically it was highly improbable. It keeps me fresh in converting binary to numbers. And no, I don't tell them if it is in octal or hex! Had to get the PINs reset after they took their tries and missed ;-)