Isn‘t the whole point of seed signer to not store the keys? 🤔

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It stores them temporarily, and could exfiltrate them to the mempool or blockchain when used.

Same with passphrases?

In principle, yes. If you can exfiltrate any sequence of bits (eg a seed phrase), you can exfiltrate whatever you want (eg a BIP39 passphrase). But it may be impractical, and I don't know if there are actual exploits.