If Decipher Backup Repair is prompting you for a backup password, the program has detected that the backup you're fixing was made with backup encryption turned on.
Decipher Backup Repair does not transmit your password or save it. Your password is used only on your computer for the following tasks:
Your backup password is used to do verification and repairs to the encryption in your backup.
For backups made with iOS 10.2 and higher, the list of files in the backup is encrypted, and Decipher Backup Repair needs to read that list to do any repairs.
For backups made with iOS 10.1.1 and lower, the backup password is optional and some repairs can be done without it. However having the backup password allows Decipher Backup Repair to do the encryption verification and repairs mentioned in the first bullet which may be necessary to get your backup restoring.
If you don't remember setting your backup password, or don't know what the password is, we have another FAQ article dedicated to ways to remember your iPhone backup password if you've forgotten it!