But why in-person? Surely the priority should be resetting passwords quickly, and doing it in-person is far from quick.

manually validating employees’ identities on camera

A password has nothing to do with validating your identity, it’s merely about authentication. Authentication and authorization are completely separate concepts. They should be resetting authentication to limit chance that an outside attacker can use compromised credentials, and then perhaps re-verifying identities separately for people with access to critical systems first.

Resetting passwords in-person sounds terrible. I use a password manager, so I would be more likely to make a bad password than a good one if I have to do it in front of someone in an interview.