1. This is not a seizure or surrender of the Passport. Who keeps a finger on what reminds me of the game of Twister from when I was a little kid (and dates me).
2. DHS is most certainly an authorized agent of the USG. The Secretary, in whose name all DHS acts, controls ICE, CBP & CIS, while State's sole function is to actually authorize and issue the Passport.
3. Put simply, State will only handle the Passport in three circumstances: A) at time of issue; B) at time of amendment / consular services abroad; C) at time of replacement (and voiding).
Of the many things to worry about in life, this isn't one.