I don't remember this issue. Do you have a large font set?
But, it just seems like a small bug, developer did not set the width of the field large enough or compensate for the font size. Can you still enter the password into the field?
I can still enter the password, and I haven't changed the font.
However, setting the font to small results in the same problem. With the letters on the same lines even.
It is a small bug, I just wanted to see if I was the only 1.
I just tried it on my Nexus 7 and saw the same issue. It does not occur in landscape orientation. My guess is that the layout used in portrait orientation is setting the EditText field too large or has the margins mis-set. Been there, done that.