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For a single password, it is indeed illogical to distribute it to others, in order to prevent it from being stolen and misused.
That said, the concept of distributing authority amongst others is quite sound. Instead of each owner having the whole secret, they only have a portion of it, and a majority of owners need to agree in order to combine their parts and use the secret. Rather than passwords, it's typically used for cryptographically signing off on something's authenticity (eg software updates), where it's known as threshold signatures:
I remember learning about Shamir's secret sharing, and indeed the concept is fascinating. I’m not sure passwords is the best use case of something like that, but I’m not completely against it in theory.