Because it is insecure. Sure, that form doesn't actually do anything, but why not help and train visitors to expect security and know how to spot it?

w3schools is for web developers who are learning. Maybe they'll see that the page is marked Insecure and the lesson they'll get from it is that they need to secure their logins.

And the user will know they shouldn't type a password they want to keep secure into that field. Makes sense to me.