here is by the way a complete script of my mentioned stuff for others:
(it starts and checks unique VS Actions/Conditions. Can be edited to check only for current acene, etc)
Edit: maybe the eKeyReturn could also be an eKeyDown because the keycode is still checked.
@marvel is this the action you call after each key pressure?
In this you only have to refresh the text and maybe change the object font for the moment (via lua). No pauses, no"|"
In ANOTHER Action you do
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change object font to password font
display text "password"
change object font to default font
wait 500ms
change object font to password font
display text "password|"
change object font to default font
wait 500ms
jump to action part #1
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this action gets called if you open/enter the scene and stopped when close/leave it or pressing enter + password=correct