Yeah, it a legit thing, for connecting apps to your Steemit account. You normally have a choice of keys to use depending on the app, using the Memo key is the safest one. Never give your main one, obviously :-)
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SteemConnectv2. This I am not comfortable with:
What kind of legit app would ask for a master password? .... that for a joke!
Depends on how much you trust the application, but any of the blockchain apps need at least one of your keys or they can't pay you !
Maybe this'll help > https://steemit.com/steem/@mooncryption/steem-keys-and-passwords-full-guide