That said, using environment variables in Python will be easier as long as you trust those having access to the machine. Note that as long as you can edit and run your own workspace on a given machine, it’s trivial to dump all environment variables to the FME log, even if you don’t have console access.
If you are referring to methods used in the workspace or PythonCallers, you can set a password in the Workspace Parameters. Other users can still run the workspace in Quick Translator without the password.
Sorry, i misread that you were referring to a workspace password. I’ve encountered many people who think that because a password in a user parameter shows as ***** it is secure.