This is nothing to do with the OpenMRS SDK, this is just how Un*x shells are dealing with password prompts.
For example you should be prompted for your local user password exactly the same way when trying this:
sudo ls /
I actually never paid attention that there was a cloning function in the SDK, you could as well just clone with Git directly and no password will be prompted:
git clone https://github.com/openmrs/openmrs-module-webservices.rest