I was trying to make an app-specific password for gmail and this came up. There aren’t any new options in the apple id settings, so idk what to do
I'm not sure what accidental journey through Gmail's options OP took but it looks to me that they inadvertently started setting up a passkey, which is tied to the hardware but can sync between Apple devices using iCloud Keychain. Apple certainly isn't blocking you from changing Gmail-specific settings.