I just tested a registration of a user and their password is showing in the user_activation_key column.
Hm, I just tested this myself, and if I give them a password (so I know what it is), user_activation_key is blank as it should be.
Further more, when they reset their password, the link to reset has their old password right in the URL!
Further more, when I reset the password, the link *does not* contain the old password in the URL, it doesn’t even contain the activation key.
My tests were run on a fresh installation of WordPress 4.8 with no plugins using the Twenty Seventeen theme, which leads me to believe that you have a plugin interfering, probably one that interacts with Users, possibly Ultimate Member based on your support history.
Can you reproduce the same on a fresh installation of WordPress 4.8 with no plugins?