How does Apple know which passwords never to be saved? When you input a new username/password combination, Apple (macOS and iOS alike) asks if you want to save the password, also offering responses of “never” and “not now.” 

I understand the “save” response: the password is encrypted and stored in the keychain, and if iCloud is turned on, it syncs across devices. 

I understand the “not now” response: make the decision another time. 

What I don’t understand is the “never” response: The password, seemingly, has to be saved somewhere that the system can access it and, if it’s set to never, not prompt a “save password” dialogue after inputting it. Try a different username/password on the same website - you’ll see that it cues the dialog again, thus proving that it doesn’t save a list of websites. 

Is this accurate? Does Apple actually save passwords you told it not to save, and “never” really amounts to “don’t ask me again”?

The same question may be asked for credit cards on supported OS’s.
It saves the site for which you don't want to save the password, not the password itself.
You can see the sites at:
Safari->Preferences->Passwords