It is just annoying for both parties. ET's need to pay attention to the chatbox frequently to make sure people are informed about the password.
Regular players need to ask in the chatbox or pm a staff member for the password and it can take some time to get a response. ET's are busy doing their stuff so they have to wait for a response, which could lead to them even missing rounds which means they miss on opportunities to earn event points.
It serves no purpose with less than 20-30 people in an event, as it nowadays never reaches over 30+ players.
An argument the ET's had was that it screws up the settings when preparing a room if people join while editing the room, but they could just create a password to configure the game settings and then remove the password once they're done/before they start the event.
It's just annoying for everyone, serves no purpose and having it removed would be more efficient for everyone.