If you've never seen this work on your device, then you might have something configured incorrectly — many app developers are incompetent and bad at this; but not _all_ of them.
It works for filling an existing password, but not for creating a new one, iOS still prompts me to fill existing even though I'm on the sign up page. On the web 1Password can also automatically generate a Fastmail masked email address, but I doubt there's any hope for that to work in a native app.
