The username and password are saved in cleartext, otherwise they could not be sent to the server to authenticate. They are relayed back to you when the FTP test fails so you can check that you have typed them correctly. The observation was that most of the times that's what the problem was — especially with long passwords typed by hand (I use a password manager to avoid this and a litany of security issues, but not all people do).
I really need to know exactly which version of Joomla! and Akeeba Backup you are talking about, though. Kindly keep in mind that "latest" is too vague to be useful in troubleshooting. Thank you in advance!
Nicholas K. Dionysopoulos
Lead Developer and Director
🇬🇷Greek: native 🇬🇧English: excellent 🇫🇷French: basic • 🕐 My time zone is Europe / Athens
Please keep in mind my timezone and cultural differences when reading my replies. Thank you!