What is a Group's Password field used for?

Solution 1:

Groups with passwords will allow a user to become a member of that group if the user knows the group password and even if the user is not a member of that group. I'm not sure that group passwords are even implemented in OS X.

In general, if you see the password field set with a single "*" that means the password is not set. Since macOS is POSIX, consulting the Open Group documentation will always give you some clues-http://pubs.opengroup.org/onlinepubs/9699919799/utilities/newgrp.html

Solution 2:

This dates back to Unix. The * locks the group so only the static members are part of it. If there is no password, then anybody can become an member of the group.

newgrp groupname