In 10.4, SET_PASSWORD = PASSWORD(...) works for users identified via ed25519. This is noted in documentation.

To identify such users, PASSWORD() produces a hashed string of a format different than usual, e.g. for 'secret' it will be ZIgUREUg5PVgQ6LskhXmO+eZLS0nC8be6HPjYWR4YJY and not *14E65567ABDB5135D0CFD9A70B3032C179A49EE7.

However, documentation for the PASSWORD function doesn't mention it, it still claims that the function always produces a 41-char-long line starting with *.

So, back to 10.4-specific part of documentation for ed25519, it says that the password can now be set as

SET PASSWORD =  PASSWORD('secret')

It is technically correct, but without mentioning the internal magic, it presumes that one can split the statement in two – first, do

SELECT PASSWORD('secret')

and then feed its result to SET PASSWORD as

SET PASSWORD = '*14E65567ABDB5135D0CFD9A70B3032C179A49EE7'

which is not true, it causes the error

ERROR 1210 (HY000): Incorrect arguments to SET

So, I suggest th extend the description of PASSWORD() function and add a note to the description of ed25519 plugin about the special behavior of the function.