As mentioned in the introduction to FIDO, there are different types of FIDO Authenticators. Remember that FIDO2 is backward compatible in that it also supports FIDO1 (U2F/CTAP 1) Authenticators but passwordless authentication only works with FIDO2 Authenticators (CTAP2).
Did you know... that a FIDO Authenticator can be used for an unlimited number of end-user FIDO accounts? Even if the Authenticator creates a new key-pair per user account and FIDO relying party, it does not necessarily have to store it in its memory.
A factory-generated symmetric key that never leaves the FIDO authenticator is used to encrypt the key pair and have it stored by the FIDO relying party. When using the authenticator, the relying party sends the encrypted key pair to the authenticator.
This allows the FIDO authenticator to serve an unlimited amount of FIDO key pairs despite its limited storage capacity.
FIDO key pairs stored on the FIDO relying party in this way are called non-resident and cannot be used for passwordless authentication.