IOS – How to sync Keychain passwords between iOS and macOS

Unfortunately I can offer no perfect solution however I can confirm this shortcoming in the iCloud Keychain sync. I've been able to reproduce this same behavior. Indeed a selective disabling ability in the keychain settings would do the trick. Until Apple implements functionality like that I think your options are

1. turning off wi-fi on your phone when your near that hotspot
2. turning off iCloud Keychain sync on your phone.

Because iCloud Keychain was delayed from the original release of iOS 7 I'm guessing Apple just didn't have time to implement finer grain controls on what is and isn't synced.

As one can see you have the "Remember Networks this computer has joined" Enabled.

When you join new network, that information is saved in the

com.apple.airport.preferences.plist

located in SystemConfiguration folder.

Obviously iCloud gets that file.

EDIT

Since you asked a new question and want to know how iCloud does that read this. (and click on User defaults database to expand)

Designing for Key-Value Data in iCloud

To store discrete values in iCloud for app preferences, app configuration, or app state, use iCloud key-value storage. Key-value storage is similar to the local user defaults database; but values that you place in key-value storage are available to every instance of your app on all of a user’s various devices. If one instance of your app changes a value, the other instances see that change and can use it to update their configuration.

and