Why Keypair is now being automatically downloaded upon creation?

You have to understand the usecase of creating keypair in the console.

By creating keypair in the console, you already give the permission to download because otherwise you will NOT create one in the first place and you don't get to download it after creation.

You don't have access to your private keys anymore after creation. That's why it's auto downloading so you will have your private key.

If you don't want auto download, don't create the key in AWS console.

If you don't download the private key, what use the public key is then? Meaning the default, and only sensible action is to download it. You can only download private at creation time, after that you can deploy the keypair to instance but there is no way of getting private key so it is kind of useless. Or am I missing something?

I don't think the issue is to do with AWS. It is browser settings that's causing the issue in my opinion. Check the option "always ask you where to save files" under Downloads in the Firefox settings. This should start throwing the prompt you are looking for. If not the issue should be in similar lines. Tweak your browser settings till you get a prompt. A bit of Google search can help if my suggestion above doesn't resolve your problem. I think you also have options to specify for what file extension types you need a prompt. Check firefox support QnAs for more.