I think the idea is that each character overwrites the previous, so you're never showing the total length (apart from 0/1!)

Ah, and the characters are supposed to be an ASCII spinner.

I think if I was new to Linux that would confuse the life out of me :)

There's no persistent reveal of password length after you're finished typing. It reduces the length-reveal leak from anyone who eventually sees the terminal log to people who are actively over-the-shoulder as you type it.

If you can see 1 char from set of 4 you know the number of characters modulo 4. If the minimum length of a password is 6, and probably it is no longer than 12 characters, then you can narrow the length to 1 or 2 numbers. It is marginally better than asterisks of course, of course, but it is still confusing.

The original suggestion included randomizing the first character of the set, which removes this attack.

They mean to have a static single character on the screen and have it change with every keypress. For example, you type "a" and it shows /. You type "b" and it shows "|", etc.