This can be changed by updating the default value in the file iotwebconfsettings.h at line 25. The IOTWEBCONF_PASSWORD_LEN should be changed from 33 to 64.
// -- Maximal length of password used in IotWebConfig configuration.
#ifndef IOTWEBCONF_PASSWORD_LEN
# define IOTWEBCONF_PASSWORD_LEN 33
#endif
A wifi password can be more than 32 characters. See the definition of the wifi_ap_config_t) https://docs.espressif.com/projects/esp-idf/en/latest/esp32/api-reference/network/esp_wifi.html#_CPPv416wifi_ap_config_t. The maximum length is 64.
This can be changed by updating the default value in the file iotwebconfsettings.h at line 25. The IOTWEBCONF_PASSWORD_LEN should be changed from 33 to 64.