So they're like fiat? Anyone can issue them? What purpose do they serve?

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They are fun art to collect. They are kinda like NFTs, but since you can't transfer them, it's not gonna become some weird big evil thing, and it will just stay fun and silly.

No purpose just fun. As profile decorations when clients will implement them.

... And the page of badges ask your private key in first field :)

Yep, but i use a browser extension. Nos2x and Alby work with Kiwi browser on android.

Yes, but it means that I should enter my private key inside of these extensions what it's not good in anyway...

And my private key will know third party side. I don't like same way. I prefer my private key by private. If anybody will know private key no way to change key, and private messages of Nostr will be read by third party side...