So we're at the point that finding hardcoded admin passwords is no big deal.
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This is the way most apps work if they have a default password the user is supposed to change.
Some form of "enter the code on the device" or "scan the QR code on the device" could then mutually authenticate the app using proof-of-presence rather than hardcoded passwords. This can still be done completely offline with no "cloud" or other access, or "lock in"; the app just uses the device secret to authenticate with the device locally. Then the user can set a raw RTSP password if desired.
This way unprovisioned devices are not nearly as vulnerable to network-level attacks. I agree that this is Not Awful but it's also Not Good. Right now, if you buy this camera and plug it into a network and _forget_ to set it up, it's a sitting duck for the time window between network connection and setup.
I used to sell a home networking device,[0] and I wouldn't do what you're describing. If there were an issue where the labels calculate the wrong password or the manufacturer screws up which device gets which label, you don't find out until months later when they're in customer hands and they start complaining, and now you have to unwind your manufacturing and fulfillment pipeline to get back all the devices you've shipped.
All that to protect against what attack? One where there's malicious software on the user's network that changes the device password before the user can? In that case, the user would just not use the camera because they can't access the feed.