Two ends holding a matching string proves they agree, not that either is right.
So the check is three logins over the private network from the consumer's own
machine: the delivered credential works, the rotated one works, and the one
that was rotated away does not. Without the last, the test passes against a
provider that added a password without replacing one.
Not over loopback: pg_hba trusts anything there, and a deliberately wrong
password returned a row for a whole afternoon once.