What does "*password------------" mean in a profile deadlock report?
It just means that the text of the statement contained the string "password" and SQL Server "helpfully" has masked it as a security feature to prevent you seeing some one else's password.

I was able to reproduce this as follows

CREATE TABLE T(X varchar(1000))


Connection 1

BEGIN TRAN

INSERT INTO T VALUES('password1') 

WAITFOR DELAY '00:01:00'

SELECT * FROM T WHERE X = 'password2'

ROLLBACK


Connection 2

BEGIN TRAN

INSERT INTO T VALUES('password2') 

WAITFOR DELAY '00:01:00'

SELECT * FROM T WHERE X = 'password1'

ROLLBACK


Then retrieving the graph from the extended events trace