In order to understand working of password fields on Wholesale Signup Form, you first need to understand customer types called 'Existing customers' and 'New Customers'.
The 'has an account' status appears to the registered customers. The registered customers are those who have signed up and activated their accounts by entering a password.
Those customers who don't have 'has an account' status and are not registered yet to your website.
When password fields appear and disappear:
For the existing customers, they have already signed up for regular account and activated their accounts by entering a password. When they request for wholesale account they don't need to set their password because they have already set it up during the regular account creation, so the Wholesale All In One application automatically hide the password fields from the Wholesale Signup Form
For the new customers, when they request for the wholesale account from the Wholesale Signup Form, the password fields don't disappear based on their entered email address because they are new customers and need to set the password.