Workspace does not automatically lock while the Generate Password is open (applies to most other dialogs as well).
I have the Security settings configured to automatically Lock Workspace after 900s of KeePass inactivity, 240s of global inactivity, or when locking the computer. None of these trigger when the Settings or Generate Password dialog is open so upon return the Workspace is still unlocked.
For a real use case, consider generating a transient password for an end user (one I will not save for myself), when I'm interrupted by other activity and end up with the KeePass UI in the background behind other windows. It may be some time before I return and finish the original task, during which time KeePass workspace is unintentionally unlocked.
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