I needed to use the Biztalk Adapter Framework PasswordUITypeEditor and PasswordTypeConverter components in the ReceiveLocation.xsd like so:
<xs:element name="Password">
<xs:simpleType>
<xs:annotation>
<xs:appinfo>
<baf:designer>
<baf:displayname _locID="passwordName">Password</baf:displayname>
<baf:description _locID="passwordDesc">Enter username for authentication to directory</baf:description>
<baf:editor assembly="%BTSROOT%\\Developer Tools\\Microsoft.BizTalk.Adapter.Framework.dll">Microsoft.BizTalk.Adapter.Framework.ComponentModel.PasswordUITypeEditor</baf:editor>
<baf:converter assembly="%BTSROOT%\\Developer Tools\\Microsoft.BizTalk.Adapter.Framework.dll">Microsoft.BizTalk.Adapter.Framework.ComponentModel.PasswordTypeConverter</baf:converter>
<baf:category _locID="authenticationCategory">Endpoint Directory Authentication</baf:category>
</baf:designer>
</xs:appinfo>
</xs:annotation>
<xs:restriction base="xs:string">
<xs:maxLength value="22" />
</xs:restriction>
</xs:simpleType>
</xs:element>