Except for the part that it’s not a question of trust (being open source), there’s no third-party architecture to trust (it can and should be self-hosted), the data on the server are also encrypted client-side before leaving your device, sure.
Oh, and you also get proper sync, no risk of desync if two devices gets a change while offline without having to go check your in-house sync solution, easy share between user (still with no trust needed in the server), all working perfectly with good user UI integration for almost every systems.
Yeah, I wonder why people bother using that, instead of deploying clunky, single-user solution.
I use this setup for my personal passwords, using nextcloud as the sync solution. A semi-fix for that was using Keepass2Android (on Android obviously). It integrates with nextcloud directly, keep a local DB of passwords, and would only load the remote one (and merge) on unlock and updates, not keeping it “constantly” sync on every remote change. It works well… most of the time… with only two devices that almost always have connection to the server… and for only one user.
It’s overly clunky though. It’s the big advantage of “service based” password manager against “single file based” ones. They handle sync. We have plans to move to bitwarden at my workplace, and since the client supports multiple accounts on multiple servers, I’ll probably move to that for personal stuff too. The convenience is just there, without downside.