Comment 4 for bug 1827501

Now I understand, what you mean with the asterisks.
I think, it is normal to hide the passwords. And you have to enter the password twice, to ensure, that there are no typos. (And from a security point of view, it would be even better not to show the asterisks)
During the installation, it uses the keyboard layout, which you have selected. (Unless there is another bug.)

The problem is, that Grub does not have the information about the keyboard layout, when it attempts to open the LUKS container (because these informations are inside the LUKS container). It uses the American keyboard layout as default.
The other flavours don't have the /boot directory in an encrypted partition. So Grub loads the kernel (or a part of it), and the kernel then opens the LUKS container.

I would say, that dropping to a Grub rescue shell when entering the wrong password is a bug, that should be solved.
And there is a request to improve the Calamares UI to provide a clear information/message/warning, that Grub is using the American keyboard layout for unlocking the LUKS container.
I am not sure, if it would be possible, to change the keyboard layout of Grub. The packages of Grub are in main, and are not maintained by the team of Lubuntu.