When you have an encrypted volume, and you first boot up, you get the usual LUKS password prompt. However, whatever keys you type for the first second or two gets ignored. This just creates confusion and can result in needless IT inquiries. To make matters worse, it's not always the case that the password is displayed with * characters. Sometimes it's just blank. The real solution is to not display the prompt until the OS is ready to listen.
I actually doesn't ignore the first key strokes, it just takes a bit until it's ready. Wait a few seconds and all your key strokes are recognized. I also didn't have the case that it is completely blank when entering the password.
However you are correct regarding the fact that it shouldn't be displayed until it's ready.