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I don't use WiFi, so I've never had this issue.. Sounds annoying though. I have had it dump all of my Bluetooth pairs though...never did find out why..
I believe it only does so if you leave all of the boxes checked when you first setup the device, allowing Google to sync your settings and etc. I know when I got my Note 4, after it was able to sync, I never had to put in the password for my in-laws wifi. They've still got a password, but I had set it up on my S4 prior to getting the Note 4 and I had the S4 set to sync everything with Google.
I have Google syncing data config and contacts but not pictures in data. Maybe wifi is considered data and not a config. I would like the convenience but the risk on both Google and Microsoft seems to be that if your data was hacked from the cloud someone could get your wifi pw which for a home wifi might not be bad but if you had your work wifi stored and synced from your phone then it would put your works wifi at risk which is a larger scale whichbis what I think the bigger issue is as hackers would probably go after the bigger more lucrative wifi targets or at least the do in the movies
Based on my experience, WiFi stuff is synced with Google only if the "Backup My Data" is checked in the Settings...it has nothing to do with other data / pic /music sync settings. I also agree with @PereDroid , unless the hacker is right next to my wifi router (work or home) I am not too worried about my wifi password being hacked from the cloud. I change it every 6 months (or sooner if the kids give it away too much) anyhow.