For single-user systems, it most likely makes no difference as the same password can be also found in many other places under your own account, e.g. on Linux it is likey stored within GNOME Keyring where any of your programs could read it.
Though it does increase the chance that your password might leak as part of the fstab entry being deliberately or accidentally, e.g. when copy-pasting configuration to your notes or when sending system logs to help someone investigate a problem with your system. (For example, a graphical file manager may keep fstab contents in memory, etc.)
This is similar to passwords in command line, or in system logs – in theory on a single-user system the log files wouldn't be seen by anyone else but you, until one day you post your system logs on a GitHub issue and your password is accidentally in there.
Finally, the "suggestion" you've found is not just given for single-user systems exclusively; often it is given to, or found by, admins of multi-user systems where it does make a lot of difference.
If someone has compromised your system to the point they can access /etc/fstab, then they now know where the cred file is, what it is named, and most likely can also gain access to it regardless of it's permissions.
No, because /etc/fstab is generally accessible to all processes and all users by default, so having access to it does not in any way imply that "most likely" you can read other files regardless of their permissions.
So if you get access to run code on a webserver e.g. as the "http" user (through a compromised PHP webapp, for example), that is still a long way to go from actually having root privileges.
Accessing a system as unprivileged user does not automatically imply compromise – it is still very common to have multi-user systems (both servers and workstations) where people other than the owner can legitimately log in. The common /etc/shadow file, containing user password hashes, is also protected mainly by file permissions.
If it does actually make things more secure, what are the best practices for storage location, and permissions to it?
When the share is mounted on boot, the credentials file must also be accessible at that point (keeping in mind that boot process has several stages – network filesystems may be mounted before certain other things happen). Putting it in /etc
is guaranteed to work (/etc/private might be a suitable place).
Putting the file in someone's personal /home may make sense if the share is only accessible to that one user (using the file_mode
mount option, for example), but this gets into opinion territory entirely.
Mounts in fstab are processed with root privileges, so the file only needs to be readable by root – and usually the whole point is that it's not readable by "world". (Although root can read files without read permissions granted it's still conventional to make such files explicitly readable and usually writable by root, i.e. 0600 or 0400 rather than 0000 permission bits.)