CloudStor provides web access using AAF authentication and has no visibility of your institutional credentials - i.e. CloudStor doesn't know what your password is (and neither should it).
Currently the clients and/or webdav can not authenticate via the AAF, so CloudStor needs you to set an alternate password to authenticate your access when using them.
Note: when you set this password it is only for use with the clients and webdav. It does not change your institutional login credentials when logging in via the web interface.